Thursday, April 13, 2006

Important Information About Your Home Loan

Dear Mortgagee:

We here at Ownyourdebt Mortgage Services (We put the "vice" in Service since 2001) have been happy to be your leinholder of choice these last 2 years. It is therefor with deepest regret that we inform you that your old loan is hereby and immediately rescinded. If you look at your note, page 42, para III, section 9.2.1 you will see that failure to pay property taxes on time is grounds for rescision. Now we here at OMS know times are tough and all so while we no longer offer a product similar to your 30yr fixed 5.25% no holdback loan that you just lost we are pleased to announce a new product; the Tax,n'Spend Megareset Home Loan. This 6.95% (intro rate) product is seriously the best you can qualify for under the new tighter lending standards so we suggest you take it. Since we have your credit and know everything about you we took the liberty of checking. If you "chose" to go to another lending institution against our advice we will be regrettably forced to report both the tax default and rescinded loan. Good luck with that.

Now don't take it like that. You aren't without options and you certainly should consider yourself lucky. We don't do this for everybody. That Schmoe Gary down the street for instance. You know the one youlaughed at for overleveraging. He didn't pay on time either but he's already in our "special clients" stable paying an adjustable 7.5% with impound and service fees. He's so upside down we don't dare use the vice (in Service since 2001) on him, he might walk. No, you are lucky. If the new rates are not to your liking OMS is prepared to offer you a very generous severance package. We'll miss you (each and every month on the 1st) but if you want "out" your house and difficulties your house being worth $800k with our mortgage only $250k (due immediately) you are indeed fortunate. We here at OMS are ready to give you 30 whole days AND $100k in addition to FULL loan forgiveness to help you start your new life as a landless renter. No messy distress selling, no middleman. Now, put down that hammer. I told you we know everything. Any damage wil come out off your severance package. Think about it, get back to us. SOON.

Looking forward to hearing from you in the next several hours.

Kindest Regards,
Your OMS Representative

P.S. Loan forgiveness is a taxable event at the full income rate and will be reported. - OMS

P.P.S. Don't forget to recommend us to all your friends!


Anonymous said...

Did I read that right? OMS is prepared to forgive $550K of an $800K loan?? Wow, where can I sign up?

Rob Dawg said...

I think it reads; " being worth $800k with our mortgage only $250k." Clear now? Iwas talking about the millions of Californians with low mortgages on vastly apperciated houses. A missed tax payment than they are potentially liable for loan calls. Scary stuff. actually sounds like an investment opportunity. Buy a lot of these low rate fixed low LTV loans and watch the taxroles carefully and extort concessions at the first hiccup.

Anonymous said...

I did not know that, is this new?

I know a few people delinquent on their tax payments, no one has mentioned the loan being called.


Rob Dawg said...

Anon (Julia),

The banks learned the hard way back in the 70s when inflation ate their mortgage portfolios. They needed a way out from under money losing loans so they introduced and/or reinforced several rules that gave them more control over the terms.

We don’t know exactly when they'll start enforcing the terms of their loans except the general; when it makes them money. Used to be 3rd year was the worst point to be exposed but we don’t have a clue how this will play out in an environment of rising rates and declining prices and rapid reporting. In case you can’t read between my lines; I’m positive that banks are poised to come down fast and hard. If you read my humorous letter you’d know that I also expect a new wrinkle; mortgage recision based on fraud/tax arears/changed occupancy status. Think like a bank: If you had a 5% fixed out there on a house purchased 4 years ago and you knew it wasn’t owner occupied what would you do? Ans; nothing until now. Now however you can call the loan and force them into higher rates or cal the loan and foreclose on a house with substantial appreciation. It pays in this environment to have a “hole card” and the best part is you get to blame the Fed and their insistence on lending standards.

A lender would have a strong incentive to call an otherwise performing 5% fixed with a late tax bill or other minor violation because it can only be replaced with a 6.5% fixed. Everyone else “upstream or down” still gets their 5% and you get rich.

Loans get closed out all the time with no problem. Happens when you refi. The process is well understood.

Loans, bonds, all kinds of debt are often subject to early calls. Happened to lots of municipal bond holders in the last few years as cities refied themselves locking in low rates. Most times there’s a limit say not callable in the first two years without penalty or only callable between 5 and 10 years, that kind of stuff.

But more important what is said; these loans are "technically" NOT in good standing. The bank probably knows it never was a primary residence like on the loan application, they know when you are late with a tax payment or lapse on PMI or even just regular home insurance. These are all violations exposing the borrower to being called. Whether they get called will depend on whether the bank sees profit in taking action.