There are people who are losing their home to foreclosure because of a legitimate financial crisis, but there are even more people who are losing their home because of lender follies and their own greed and stupidity. Here are five stories in particular that are sure to induce a fit of eye rolling.
1. Casey Serin
Casey Serin--the self-dubbed 'World's Most Hated Blogger'--purchased eight homes between October 2005 and May 2006 intending to fix them up and sell them. The unemployed Serin lied on all of his mortgage applications to get the loans and receive cash back at closing. At one point, the 24 year old would-be real estate mogul was more than $2.2 million in debt.
Not surprisingly, Serin lost all of his homes to foreclosure in 2007. The news coverage was significant. The earliest media stories suggested Serin was a victim of greedy mortgage lenders, but reporters eventually picked up on the fact that the guy lied on his mortgage applications and coverage turned negative.
How does a California strawberry picker earning less than $15,000 a year get a home loan for $720,000? That was the question everyone wanted an answer to last year. Borrower Alberto Ramirez, an immigrant who did not speak English, blamed his real estate agent.
Apparently, the agent was so eager for commission that she arranged for the loan through New Century Mortgage and paid what the Ramirez family couldn't for several months. This arrangement was supposed to carry the borrower until he could refinance.
But of course, it wasn't the loan that was the problem--the house was simply unaffordable given the borrower's income. Within a few months, the agent quit subsidizing the Ramirez's payments and the borrower quit paying on the advice of an attorney.
A number of sites linked the story of Cynthia Szukala, which first ran in the New Angeles Monthly. The story painted the newly widowed Szukala as the ultimate victim of unscrupulous mortgage brokers.
Szukala claimed a broker took advantage of her and her husband in 2006 when they made the decision to refinance by putting them in an interest only loan. The writer of the story mentioned Szukala's tear-filled eyes and the fact that the widow had no idea how she would make the mortgage payments when the loan reset.
After several blogs linked to the story, a studious reader decided to do the legwork the reporter should have done. The reader found that the Szukalas knew much more about the mortgage business than Cynthia had let on.
In nine years time, the couple had refinanced their loan not once or twice as Cynthia indicated, but seven times. They had been living off equity for years, borrowing nearly $300,000 in all (about $31,300 per year).
The story of a Fullerton area elderly couple who couldn't afford their mortgage payments sparked a huge online debate when it first appeared in the Orange County Register.
Some readers sympathized with the Coffmans who were unemployed, 60 years of age and caring for six adopted grandchildren. Others were so outraged at the paper's 'bogus heart tugging drivel' that they demanded the story be pulled.
The debate centered on the fact that the Coffmans extracted more than $600,000 from the $97,000 home they bought in 1977. The bulk of the money--$552,300--came from Countrywide in 2005. The rest was obtained later from several other lenders, including Washington Mutual, Wells Fargo and Greenpoint Mortgage Funding.
The Coffmans can no longer afford their mortgage payments on the $5,400 a month income they get from Social Security and government assistance. There is also no money left for a refinance.
Countrywide claims they are not to blame as the Coffmans had a firm understanding of the negatively amortizing loan they chose. To the Coffman's credit, they admit that they made 'some really bad decisions.
Jeffrey and Vanessa Hahn bought a $475,000 house in 2004 using an adjustable rate mortgage and took out a significant home equity loan not long afterwards. In September of 2006, the interest rate on the main mortgage reset, causing the payment on their main mortgage to increase from $2,200 per month to $3,700 per month.
In March of 2007, the couple got a cash-out refinance to the tune of $570,000 even though the required monthly payments equaled their monthly take-home pay. Needless to say, they never made a payment on the loan and lost their home to foreclosure.
When the San Francisco Chronicle profiled the Hahns, Jeffrey said he was 'shocked' by the number of hate comments that were generated.
'I just don't get how these people can judge me like this and think we completely took advantage of the system. The system took advantage of us,' Hahn was quoted as saying.