Posts Tagged ‘interest’

Considering the big hand of small time lenders fraudulent maneuvers in mortgage loans, New York state has made it a law that all those originating mortgages from here must be checked for criminal backgrounds and their fingerprints taken to prevent a repeat of the foreclosure crisis that is raging.

Many like Elizabeth Giammarino who had been cheated in 2006 by lenders sigh and wish that the law had been effective few years back. Two men had cheated her and those same two have been lately arrested for drug trafficking recently. One of them, Joseph Crapanzano was a criminal record holder related to mortgage scams even before he duped Elizabeth’s mother about preventing foreclosure. The old lady sunk further into debt after she could not manage the interest only mortgage taken in 2006. Several mortgage companies were involved in her complicated case. A widow of 9/11, Roxann Giordano had made a legal loan to Mrs. Giammarino that helped to stop the foreclosure on her house. The argument is that Mrs. Giammarino suffered investment losses that made it impossible for her to carry on with the mortgage. Mrs. Giordano claims that she never met the criminal Crapanzano or the other person LaMassa who are supposed to have brought the parties together for a solution. Shortly after being arrested LaMassa claimed that he was a loan officer representing E-Island mortgage. It is the same company that dealt with the Mrs. Giammarino. The name of Crapanzano still pops up in the E-Island website. Both the men are now out on bail. When Crapanzano had dealings with Elizabeth and her mother he had already served 21 months sentence in a federal prison regarding shady real estate matters in Florida. He had forged income proof to lay hands on loan amounts. It did not deter him from continuing with his criminal habit.

The banking department of New York state is optimistic that by this new law unsavoury elements will be weeded out. Previously such types of people worked under license brokers. It is estimated that 40,000 such applications will be screened and processed by 2010. The names will be made available to 40 states that are participating in the programme. It will automatically apply to Summit Investments Loan Corp. based in California. Their attorney remained non committal. Crapanzano’s criminal lawyer too remained silent. It was just blatant profiteering without a veneer of excuse.

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At the root of foreclosure blues is the unwise mortgage decisions. The borrowers did not think before they leapt. The result is that today thousands of families are paying the price for rash decisions. If the lender does not get his or her dues there is no alternative but to initiate foreclosure proceedings against the offender.

Foreclosures are nothing new in the judicial and financial world. Today what is new is the number of these foreclosures that are running into millions across the nation. So the best and basic way to avoid foreclosures is not to go for something that one cannot afford. There is no point in biting more than what one can digest.
Before opting for a mortgage do some serious research and find out the different kinds of mortgages. Walk into a bank and a new one will be on the notice board each day. Banks are the architects behind these new mortgage products – each having is pros and cons and each claiming to be better than the other. The job of the borrower is to pick the shoe that fits and not the one that pinches. There are fixed rate, adjustable rate, interest only mortgages etc. If you pick the wrong one then you are asking for trouble – inviting foreclosures to knock on your door.
Many potential borrowers do not focus on the ancillary costs associated with foreclosures. All these total up to make the house very expensive. Apart from the very basics of mortgage costs there are closing costs, application fees, insurance charges and above all penalties charged for foreclosing. A mortgage for $1,000 may seem appealing but there are hidden costs that strike with a hiss at the opportune moment. The cost thus rises. So it is better to think before inking. One must be realistic and conventional when dealing with such life and death matters like house mortgage.

Affordability of mortgages is relative to the income and life style of the borrower. One major point is that mortgages carry on for 20 to 30 years and so the question about income and sustainability is not just about today but tomorrow also. One of the best options is the fixed rate mortgage – it is what it says – the rate remains fixed and does not fluctuate. This allows for something very precious in the modern world – tension free peace of mind.

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