James S. Graner

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Borrower Feels Injured By a Subprime Mortgage! Naive or Careless!

One evening last week, I answered my cell phone and heard from a desperate lady. I, as an appraiser in Missouri, was asked for advise on this woman's overall mortgage condition. She found my website and ActiveRain Profile on Google. Her house was on the other end of the state, well outside my St Louis Metro Area, however I listened to her problem.

A licensed/certified appraiser in Missouri valued her home at $96,000 two years ago. She took out a cash out refinance mortgage on an adjustable rate mortgage. Her mortgage person told her the rate would adjust in two years, however she could improve her credit score over two years and refinance into a better mortgage. Well two years are up and she applied for a new mortgage, two Western Missouri appraisers have appraised her home for less than the current mortgage amount, $77,000. She cannot refinance her home, and her current interest rate is 11%. She mentioned the cashout mortgage was to consolidate credit card balances.

Did the real estate market fall in her town? Maybe SO! Did an her local Missouri Appraiser overvalue her home, two years ago? I do not know! Did her Mortgage Professional act outside of a fidicuary responsibility in burying her? Probably not. I heard many accusations about three appraisers, mortgage originators and the overall banking system. I did not hear her say that if she had not used her house as an ATM, she would have been in a better financial situation. I have not investigated her files, however she did tell me that SHE WAS THE ONE that spent her cashout funds. She wanted a remodeled kitchen and a finished basement.

I am here story after story of people that spend more money than they earn and wonder why they have a tough time, some even blame others. That problem is when you spend borrowed money, from people who make the rules, you always have a potential problem. Most people need to borrow money for their home purchase and car purchases, nothing wrong with living the American Dream. I do not understand those that spend money month after month without a repayment plan, then mortgage their family's security (house) to pay for a lifestyle they cannot afford. I see few of these people state their personal responsibility in their own finances.

Comment balloon 7 commentsJames Graner • January 28 2009 10:55PM

Comments

I wish I knew more about what made her circumstances influence her decisions, but I guess in the end all the empathy and sympathy will not change the fact that she is in trouble now. This is a tough market, indeed... 

Posted by C Tann-Starr (Tann Starr & Associates, Inc.) about 9 years ago

True that her circumstance might have made her actions reasonable, however I have a problem with others being held responsible for money she borrowed and spent, while she is a victim.

Posted by James Graner (Residential Services: http://appraisalmo.com) about 9 years ago

Was her first mortgage company Ameriquest? 

Posted by Goodbye Active Rain, Out of Real Estate about 9 years ago

This is going to sound crass and heartless, but the first thought that ran through my head was 'don't use your house like an ATM machine'.

Don't get me wrong, I feel for this woman and all others in her situation, but people have to have some self-accountability, too -

Posted by Sara Goodwin, Portland, Oregon Appraiser (Ashcroft & Associates) about 9 years ago

Sara,

Exactly my point, thank you! She wants blame to go on everybody except herself. Nobody spent this money for her.

Posted by James Graner (Residential Services: http://appraisalmo.com) about 9 years ago

If she bought stock on the nasdaq and it went down who would she blame then. I'm an appraiser in south florida and watched home values doubled in a five year period. Its risky to buy a home that just double in the five year prior. There are always risk and reward in investing.

Posted by Michael Regan (Deerfield Beach Appraisers) about 9 years ago

Howdy there James

This sure sad story about that lady. Folks really need to stop and think, how am I going to pay this money back. Before they use their home as an ATM.

God Bless America

Posted by Dale Baker, New Hampshire Relocation Real Estate Information (Baker Energy Audits and Commercial Properties Inspections) almost 9 years ago

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