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View Full Version : Random rant on Credit issues...



Airbozo
09-03-2008, 12:35 PM
OK, waaayyy off topic, but this is my rant for the week/month, etc...

So I own my own home. Well half of it anyway. 5 years ago we refinanced to a 15 year loan at a very low interest rate and took out some money for a remodel. At the same time we got a line of credit in case the remodel went over budget. It didn't and we only drew a small amount of cash on the second (for something simple I cannot remember now), but it is totally paid off.

We have NEVER paid any bills late. Not even by a day. Our credit score is at the top end of the scale. We pay more on our mortgage than we have to just to pay it down early.

So I find out yesterday that our mortgage company was sold to another larger company (big surprise :rolleyes: ) and in that notice was a comment about how our credit rating is going to affect our ability to keep our line of credit!?!?! This was not a blank form letter, but one specifically targeted to us. I call our loan rep and he calls me back (while I was driving home so I did not get the message) and tells me that yes our first loan AND our line of credit is going to be affected by this merger/sale.

WTF!?!?! How can they change the terms of our first loan? I know that due to the credit and housing issues that some lines of credit are being affected, but why should WE have to pay for other peoples mistakes? Now we are in the process of starting a kitchen remodel and may not have the funds available to accomplish the task.

Sheesh, people over extend themselves while we are careful to live within our means and take strides to NOT have outstanding bills and WE get screwed over? The new company should HAVE to abide by the terms of the original contract. I have a call in to our lawyer to see if they can legally change the terms of our original loan agreement (which I doubt). I am also going to ask if they can change or cancel the line of credit since we have 5 more years on the draw... No where in the contract do I see any way for them to change anything without our agreement.

To hell with all those people writing bad loans. To hell with all those people whining about losing their homes when they KNEW that they could not afford it but bought it anyway. I should not have to pay for their bad decisions! If you were scammed into buying a house you couldn't afford I am sorry, but make the loan writers pay NOT ME!

/rant off

Xpirate
09-03-2008, 01:11 PM
You can refinance with a different savings and loan company. If you call the current company you are dealing with that you are considering doing that, they might change their tune.

I don't think that they can change the terms of your first loan. My student loan got sold several times and the interest rate always stayed the same.

Bopher
09-03-2008, 08:40 PM
Thats weird. I agree there, I don't think they can change the original agreement on you. For my first car loan the bank was bought by Banknorth and nothing changed.

TheGreatSatan
09-03-2008, 09:46 PM
It sounds like a back handed way to get more money to cushion all those morons who got Adjustable Rate Mortgages. Pricks....

Airbozo
09-03-2008, 11:10 PM
Well the lawyer said pretty much the same thing. They cannot modify the original contract so we are safe there. He did mention that there might be a way for them to call the line of credit and have it canceled. I will be calling our rep tomorrow to make sure of the terms of the credit line to see if we can make sure the honor it. Usually they have to show some error on our part to have it dissolved (I think that was the term he used). Since we have only drawn about $2k on it and paid it off very quickly. they hopefully will not be able to touch it. I need to find out from our rep though. The SO and I are wading through the _intentionally_ legally worded contract to see if there is an out for them. The lawyer gave us some hints on what to look for and I will be faxing it to him tomorrow for him to look at.

Tools! We secured that line of credit on OUR GREAT credit rating (Thanks wifey) and it has not changed so why do they want to f with us? This whole housing issue and credit issue has me pissed off. People made bad decisions WHY DO I HAVE TO PAY FOR IT? AND to top it all off those same people who over extended themselves are being portrayed as VICTIMS! I know what I can afford and I act accordingly.

Damn here I go again...

TheGreatSatan
09-03-2008, 11:48 PM
It's killing me to hold back, but I totally understand.

Zeus
09-05-2008, 05:07 PM
any updates on the situation?

Airbozo
09-05-2008, 07:41 PM
Talked with the original loan guy last night and he echo'd what the lawyer said. They cannot change the first. Good thing too since that loan has a KILLER rate.

The line of credit is a different story. The company that held our first also has the line of credit. The company (company A) sold off all of it's mortgage business to another company (company B). It was a complete sale of the entire mortgage arm of company a. This did not include any lines of credit. Company b is now required to honor the terms of the first mortgage. Company a still holds the line of credit which has 0 balance. There is a safety net built into the contract of the line that allows company a to "call" the loan. They cannot force you to pay off the balance all at once but they can cancel any "draws".

He did mention that he has had a couple of clients get their lines canceled but that was back in march just before they started the talks of selling the mortgage arm of the company. He said that if they have not canceled the line by now they _may_ not. But since he is now with company b, he has no way of checking. He also said there was a company offering 8% interest on a 1 year CD for people in our situation and that if we just wrote a check for the amount of our line and deposited it into this account, the interest we gain on that CD would offset any interest we pay on the line (accounting for taxes on the CD and tax breaks on the line).

Damn this hurts my head. I need a Cider!

Drum Thumper
09-05-2008, 10:26 PM
He also said there was a company offering 8% interest on a 1 year CD for people in our situation and that if we just wrote a check for the amount of our line and deposited it into this account, the interest we gain on that CD would offset any interest we pay on the line (accounting for taxes on the CD and tax breaks on the line).



This sounds like money laundering. I'd proceed with caution.

NightrainSrt4
09-06-2008, 07:17 PM
That sucks. I'm totally there you though. To be honest, I am not super educated in the economy and such, but I know enough that what everyone is going through is NOT good.

The original loan for college I had, which would have me set for the rest of my time there, got screwed in much the same way. The company sold it off, and although the original contract said I could get more money each year on the same terms without having to file for a NEW loan, apparently the new company doesn't have to honor that contract so it was an extreme pain trying to get money for school this year. On top of that, the college limits the amount you can take, so even though I was approved for everything I needed, the college told the company we didn't need that much and wouldn't give me enough for the year.

Zeus
09-10-2008, 11:27 AM
This sounds like money laundering. I'd proceed with caution.

I don't know about it being money laundering, but I would definitely consult an accountant before doing any of it. Do you happen to have any friends who are accountants or anyone you can talk to that won't charge you an arm and a leg?

Airbozo
09-10-2008, 01:10 PM
I don't know about it being money laundering, but I would definitely consult an accountant before doing any of it. Do you happen to have any friends who are accountants or anyone you can talk to that won't charge you an arm and a leg?

I spoke with our accountant and our financial adviser and this is legit. It is not money laundering in any sense of the term. Anyone can walk in and with a minimum deposit can get the same rate on a year term investment. The only issue is if you try to take the money out before the term is over. You end up having to pay a huge penalty which negates any interest you have earned (and if I read the fine print correctly you forfeit any interest).

The main reason this seems odd is the interest rate we have on that line. It follows the prime lending rate which is currently at 5%. Trying to lock in a fixed rate would end up around 7-9%. (I think)

stewart123
09-10-2008, 02:47 PM
It's killing me to hold back, but I totally understand.

In one sense I agree with him...in the other sense he is not considering how much money was made off of those people for the longest time that allowed rates to stay down along with the economy to keep booming because of the spending...personally, I have been very cautious for a long time.

Airbozo
09-10-2008, 03:30 PM
In one sense I agree with him...in the other sense he is not considering how much money was made off of those people for the longest time that allowed rates to stay down along with the economy to keep booming because of the spending...personally, I have been very cautious for a long time.

I do understand both sides. I have considered how much money was made by everyone involved and how many people have lost their life savings. There again are 2 sides. On one side you have people trying to help those people trying to get into home ownership in an affordable way. You also have the people trying to get people into houses any way possible without thought to how those people would afford the house after the balloon payments.

But then again is it really the job of a mortgage broker to mind your finances? They get paid once the loan funds and they could (pretty much) care less after you sign the papers. I know when I go to buy a house what I can afford today and what I should be able to afford tomorrow. I even took into account what would happen if i lost my job and bought the most house I could afford at the time. If it was up to the real estate agent or mortgage broker I would be in a MC Mansion right now struggling to make payments.

_I_ took control of my finances and _I_ dictate how much I spend and act accordingly. My gripe here was not that reckless people have ruined the credit market for me, rather it was why should I be punished for those people spending recklessly. (close but not quite the same thing) I feel I should be rewarded for my good credit history and sane use of my present and future money.

...and I disagree that the rates stayed down and the economy was good. The economy has been crap since the republicans took office, even before the world trade center incident. Pushing rebate checks and preventing the collapse of the housing market has only made the bad times last longer. Of course that is all my opinion.

stewart123
09-10-2008, 03:51 PM
You have to keep in mind too, that one of the big reasons for the mortgage crisis is because homes were over valued and the lenders didn't have much problem giving money way as long as an appraiser agreed on the value of the house (of course they also made more money on it at the time)...but now people sit back and look at the value of their house and just don't care much...People are afraid to buy because the values just keep dwindling....Things will get better soon.