Strictly a thread to promote discussion, if desired. Briefly:
The newspaper story from 10/27 in the San Francisco Chronicle is about a disabled individual who had two loans with Countrywide, a mortgage loan (155K) and a home equity loan (20K). The home is valued at approximately 500K. He had about 61K of the mortgage loan paid and was current on that loan, but had not paid the 20K HEL for about a year. (The individual claims that he stopped making payments in April, when he says that he stopped receiving bills from Countrywide.) Countrywide foreclosed, and the investors who bought the house from the bank in turn re-sold the foreclosed property. The individual found out about the sale when the new owner slipped a note under his door, ordering him to move out within three days.
Countrywide had tried to contact the individual numerous times via phone and mail, with no response from the individual. He only speaks Mandarin and Cantonese, and his family claims that none of the contacts were done in those languages. It's unclear whether Countrywide knew or should have known about the language barrier. The note slipped under his door by the new owner was in Chinese and English.
I can't comment on the legal aspects of this case, although such comments by attorneys are welcome. Did Countrywide do all that it should have done before foreclosing, given the rather unique circumstances of the situation? After all, Countrywide had two loans, and the individual was current on the much larger mortgage loan. For example, should Countrywide have actually sent someone to the individual's house, instead of apparently relying solely on unaswered phone calls and letters? Countrywide has a couple of offices nearby, so a visit wouldn't have been that difficult.
Would it also have been smarter for Countrywide, especially given all the subprime problems happening now, to have taken these extra steps (or any others that you can think of) to prevent the foreclosure? Should a bank with a community presence go beyond its standard practices to serve its customers in that community? This publicity associated with this foreclosure surely can't help Countrywide's image in the community or elsewhere.
It's easy to say and true that the customer didn't meet all of his responsibilities for the loan and is responsible for the problem that resulted in the foreclosure. Despite this, can anyone make a case that Countrywide could and should have done more before foreclosing?
Like I said in the other thread, yes, foreclosure was appropriate. The borrower defaulted on a loan that where the house was the collateral, i.e. you don't pay, we take the house and pay off the loan. The borrower should not have taken out a loan in a situation where he could not communicate with the lender directly, or even read the loan documents.
What happened to do the difference between the sale price and what was owed on the loans? Did Countrywide get to keep that?
No the artcile left out how much the house sold for at the foreclosure sale.
The homeowner had to be paid the excess after loans and fees were paid. So he likely got a coupel hundred thousand dollar check. That part of the story was left out.
Personally I dont think he should get a break for not being able to read English. He knew full well he had a 2nd mortgage for $20k and hadnt been paying it
therivler1 said:Like I said in the other thread, yes, foreclosure was appropriate. The borrower defaulted on a loan that where the house was the collateral, i.e. you don't pay, we take the house and pay off the loan. The borrower should not have taken out a loan in a situation where he could not communicate with the lender directly, or even read the loan documents.
What happened to do the difference between the sale price and what was owed on the loans? Did Countrywide get to keep that? Thanks for your response. I don't know the answer to the question, and would be interested in knowing. If the bank in fact kept the money, would it make any difference?
To all:
I just wanted to put this thread out here if anyone wanted to discuss the topic. Personally, I'm more interested in the responses than trying to argue it one way or the other, beyond my initial statement. If I do come up with some other ideas though or find out additional information, I'll certainly mention them/it!!
There is no way Countrywide could keep the excess, its unfortunate they didnt mention the foreclosure sales price, and the excess paid to the homeowner. Misleads a lot of readers who do not understand the foreclosure process.
It probably would have been a better business decision (and MUCH better PR decision) for Countrywide to try some "personal outreach" instead of just sending unclaimed certified letters. But with the # of homes in default, its not only impractical, such persons might face the wrong end of a gun if making a personal visit (espec in Oakland)
glxpass said:Countrywide had tried to contact the individual numerous times via phone and mail, with no response from the individual. He only speaks Mandarin and Cantonese, and his family claims that none of the contacts were done in those languages. It's unclear whether Countrywide knew or should have known about the language barrier. When you get your house foreclosed on, if it's worth anything at all, you get over a dozen nasty-looking notices from the bank, and you will get several hundred contact attempts from the pre-foreclosure vultures.
I'm certain that this guy got several hundred notices that his home was being foreclosed upon. It didn't occur to the guy, when his mail volume started picking up to dozens of pieces per day, that maybe he should ask someone who can read English what the heck was going on?
This article will give a big boost to those in California government who want all loan documents to be printed (or at least available) in 5 languages. I assume one of the Chinese languages would be among the five.
I'm certain that this guy got several hundred notices that his home was being foreclosed upon. It didn't occur to the guy, when his mail volume started picking up to dozens of pieces per day, that maybe he should ask someone who can read English what the heck was going on?He did. I saw this guy on TV, they showed his stack of junk mail and UNCLAIMED CERTIFIED MAIL NOTICES from the post office.
He said that his relatives told him to ignore junk mail and he thought the USPS notices were for more junk mail.
ThursdaysChild said:This article will give a big boost to those in California government who want all loan documents to be printed (or at least available) in 5 languages. I assume one of the Chinese languages would be among the five. I am a bleeding heart liberal, but even I think that is absurd.
SUCKISSTAPLES said: He said that his relatives told him to ignore junk mail and he thought the USPS notices were for more junk mail.Flicking excuse and we all know it. This thread is a waste of bandwidth.
SUCKISSTAPLES said:He said that his relatives told him to ignore junk mail and he thought the USPS notices were for more junk mail.I've lived in a non-English-speaking country before, and I'm trying to muster up some sympathy for this guy, I really am.
If the guy ended up with a 200k check after 100k debt paid off, then 'fees' were about $150,000 if the house sold for 10% below market value.
I don't know how much of that $150,000 went to CW, but it certainly makes the proposition of foreclosure from the mortgage company's standpoint a much easier, in fact profitable, decision. I don't find much sympathy for the homeowner, but the system should not encourage foreclosure, regulatory demands aside.
"Two Alameda companies, Greater Alameda Foreclosure Investments and Golden State Foreclosures Investment, paid $190,300 for the house at the foreclosure auction. That bid paid off the $20,000 home equity debt; they still need to pay off the $94,000 first mortgage to have clear title."
I think that answers the foreclosure price question, correct? I wouldn't think any subsequent re-sale of the house would matter for reimbursement purposes.
I have to admit it's hard to believe the guy would have just ignored all the notices without questioning them. I did get the impression that his Parkinson's may have had some effect on his mental state. It's even harder to believe that he would knowingly have put himself into the situation of losing his house. Remember, he was current on the primary loan. I'm pretty sure more is happening here than the story is relating.
Personally, I don't find it hard to sympathize with him, although that's not the same as saying there should be no penalties involved. I just don't think, however justified it was legally, a penalty like this was the best solution to the problem.
the "system" did not encourage foreclosure. Countrywide mad deozens of attemmpts to contact the borrower for months on end. If someone ignores their lender and their loan (which they KNEW they owed) for months, the remedy is to foreclose.
Countrywide had nothing to do with the low sale price, or the investors desire to gouge the homeowner by offering his own home back to him for $500k
I find it odd that he didn't understand any of the letters from the bank, but he understood the note from the new owner of the home that told him to get out.
The homeowner borrowed the money and then didn't pay it back. If he did not know that this would (and will always) result in foreclosure, well, he knows now.
soundtechie said:I find it odd that he didn't understand any of the letters from the bank, but he understood the note from the new owner of the home that told him to get out.
The homeowner borrowed the money and then didn't pay it back. If he did not know that this would (and will always) result in foreclosure, well, he knows now.
Did you even read the article??
"That note was the first Chinese-language communication Lin's family says he has received about the home's sale. He speaks only Cantonese and Mandarin."
glxpass said:Personally, I don't find it hard to sympathize with him, although that's not the same as saying there should be no penalties involved. I just don't think, however justified it was legally, a penalty like this was the best solution to the problem.Ok, what do you think Countrywide should have done?
SUCKISSTAPLES said:Home visit or Chinese language notice Yep, both would have been better. Had they occurred, especially the visit, I doubt that there would have been a foreclosure.
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