Hermes Maldonado, who lost homes to foreclosures, in his new home in Moreno… (Los Angeles Times )
Re “Lesson learned?,” Nov. 14
I found your article fascinating and enlightening. I have been in the mortgage industry for almost 20 years. I have seen it all. I worked for reputable major banks; we were not permitted to make loans guaranteed to blow up eventually. Now the banks that bought bad loans from less-than-honorable mortgage professionals are paying the price.
Your example of the borrower who put a Cadillac and Mercedes Benz in his driveway is a perfect example of why loans went bad.
I am happy he can purchase a new home and not make the same mistake again. What bothers me are the tens of thousands of people who cannot refinance. They have made payments on time. Their credit scores are good, yet we cannot help them. Their property values have declined to a point at which investors will not accept this type of loan. They are simple people who did what was asked of them, and they are on the outside looking in. It's just not right.
The Federal Housing Administration is helping this homeowner and the whole housing market by financing his new home despite his bankruptcies and foreclosures.
As your article says, the FHA “has become a major source of cash for so-called rebound buyers — a burgeoning crop of homeowners with past defaults who otherwise would be shut out of the market.”
I bet (and hope) he has learned the hard lesson about excessive debt.
And we all enjoy the benefit of another small boost for the depressed housing market.
It's nice to know this man was able to afford a new home, after two bankruptcies and two foreclosures. To the people like me, who live within their means, it's just a slap in the face.
Goods and services do increase in cost, due partially to people who go bankrupt. And to do it twice is just wrong.
Sir, you are welcome; let me know if there's anything else we can do for you and your family.
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