Restructure My Mortgage, Wells Fargo

(An article of Louis Even, first published in the January, 1970 issue
of the Vers Demain Journal.)

"The legislative power has its seat in parliaments, since this is
where laws are discussed and voted upon.

The executive power resides in the offices of ministers, since it is
they the Prime Minister and his Cabinet who make the decisions which
are carried out by the civil servants.

The judiciary power resides in the courts, since that is where the
judges practice their duties.

And where does the superpower, the monetary power, reside? The
monetary power resides in the banks. It is in the banks that financial
credit is actually created and cancelled.

It is when a bank grants a loan, either to an contractor, a retailer,
or to a government, that new financial credit is created. The banker
credits the borrower's account with the loan granted, just as if the
borrower had deposited that amount. But the borrower actually neither
brought in nor deposited any money, since he came to the bank to get
money he did not have.

The borrower will now be able to issue cheques on this account that he
did not have when he entered the bank, but that he now has upon
leaving the bank.

No account of any other customer of the bank was reduced. This is
therefore a new account, added to the accounts that already exist. The
total credits in the total accounts of the bank are therefore
increased by the amount of this new account.

There is therefore an increase in financial credit, modern money,
which will be put into circulation by the cheques of the borrower
issued on this new credit.

On the contrary, when a borrower comes to the bank to repay his loan
(credit that had previously been borrowed), it reduces the quantity of
credit in circulation accordingly. The total quantity of blood in the
economic life is thus reduced by the same amount.

A simple bookkeeping operation, made with one stroke of the pen, had
created financial credit. Another simple bookkeeping operation, when
the loan is repaid, cancels, destroys this credit.

It is easy to see that, if during a given period of time, the total of
the loans exceeds the total repayments, this puts more credit into
circulation than what is cancelled. On the contrary, if the total of
the repayments exceeds the total of the loans, it causes a period of
reduction of credit from circulation.

If the reduction period persists, the whole economic body is affected
by it: it is called a crisis a crisis caused by a restriction of
credit.

Since the borrower must pay back more than what was lent to him,
because of the interest, he must withdraw from circulation more money
than what was put into circulation. For this, he must withdraw from
circulation extra money that has been put there by other borrowers. As
every new credit comes from the banks, under the condition of paying
back more money than the capital amounts loaned out, other people must
also borrow, following the first borrowers. The latter have even more
difficulties in repaying their loans, since they have to find extra
money out of the credit in circulation, which is already reduced by
the amount of money that the first borrower had to repay in interest.


This chain goes on in the same way for the next borrowers, and
eventually, some cannot pay back their loans. Then the banks restrict
further loans, which slows down the whole economic life. But the banks
put the blame for this situation on the population that suffers from
it.

In order to have the flow of credit that is required for economic life
resume, the chain of loans will have to take place again, breeding a
bigger and bigger chain of debts."

In my estimation, this is why we are now "bailing out" the banks
because they accelerated the rate at which this crisis would have
taken place eventually; though I must agree that, in large part, it
was done implicitly with the borrowers permission. Everyone assumed
that their house would keep going up in value and if they lost their
job or "hard times" came, they would be able to sell the house at the
new higher value and everything would be good because they would have
actually made some money off of the house. However, when people were
unable to pay their loans and could not find a buyer for their house
this caused housing prices to fall and accelerated the rate at which
foreclosures occurred especially among people and businesses that were
prospecting but now found themselves attached to loans that were worth
more than the house. Notice that these "predatory lending" practices
were virtually legalized by the Congress, though I am guessing that
the banking community lobbied for this to occur.
It is not a shocking fact, unfortunately, that it has come to this as
"payday loan stores" have popped up on every corner in economically
disadvantaged areas offering loans in excess of 150% APR and the
people have clammored to get these loans for various reasons.
Naturally banks wanted to find a way to attract the same type of
customer but in even more deceptive ways probably knowing that if it
all went south a bailout would come because otherwise the whole
monetary system crashes and most people are left with little to no
actual means to support themselves.
This type of crisis has happened before and will happen again because
we are all complicit in allowing banks to give us money (create money)
based on our promise to pay it back. Please note, "The latter have
even more difficulties in repaying their loans, since they have to
find extra money out of the credit in circulation, which is already
reduced by the amount of money that the first borrower had to repay in
interest."

I also have to deal with Wells Fargo, and believe me, I feel
"personally defiled" every time I have to deal with them. They for
instance: Lost a payment, initiated a default, and increased our
interest rate by 4%, and charged us $800 in fees. When they found the
payment, they credited it to our account, and maintained the
increased
interest rate "due to our financial history with them" even though we
had never been late on a single payment before the lost payment. They
are still deducting the $800 in fees plus interest from our monthly
payments. What Wells Fargo does isn't illegal, but so close on that
fine line that as the above poster mentions, it's consentual, but it
still feels demeaning.

Thank you everyone, for your replies. All points are well taken.

Yes, you are absolutely 100% correct that I should not have used the
word "rape" and for that I sincerely issue my heartfelt apology.

As for taking responsibility, yes, I do take my share of the
responsibility. After reading the angry responses I can only pray that
none of you ever fall into the same situation where even talking to
someone on the phone at the lender is frustrating. All I initially
asked for when the first payment was late, was for some assistance and
guidance as to how to resolve that late and get back on track. I got
nothing but run around and was told that unless the NOD was filed,
they couldn't help me. So there is more history that what I wrote,
and admittedly, I wrote out of anger.

Thirdly, I was not denegrating anyone regarding the amount of money
they make. My husband only makes $10 per hour and he works extremely
hard. I was simply stating that the requirements for someone to be a
work out negotiator required NO BANKING EXPERIENCE. I've worked since
the age of 11, starting out babysitting. I don't have a degree. I've
scraped my way up the ladder and sometimes back down again, and then
you get back up and start all over. It is what it is and anyone who
works hard, regardless of their income, deserves praise. So if you
took that personally, then again, I apologize.

If you feel that you need to vent on me some more to feel better then
have at it. I didn't personally attack any of you.

I have only two words:
Personal Responsibility.

As for the letter, it's poorly written and hard to understand with the
all caps. The words Mortgage Rape should have not been used, as well
as the information about your sons.

Hey Barb,

I have to say that I feel for you and your family. I think a lot of
people are coming down hard on you here but it's really to point out
that you must read everything carefully before you sign. I worked in
mortgage for ten years as a loan officer, funder, and processor. It
never ceased to amaze me how many people would not read the documents
before signing. As a pp said- the notary simply witnesses your
signature. Thats all they can do.

As for the rate and nature of your loan, well, many borrowers have
resorted to these types of loans. Adjustable rates that capout
through the roof. Sure the rate is low enough to get you into the
home but the down side is that once the rate begins to climb how are
you going to manage such a payment? Regarding the loan officer who
quoted you the 6.5%. Rates change everyday and in order to capture a
rate you must lock into it and then the loan must be funded before
that lock expires. Often, it's not that a LO is being deceitfull.
It's simply that the underwriter steped in and said- we will close
this loan under such a rate,etc,etc. Many borrowers find that details
of their loan have changed once they go in for signing. Often, the LO
is not aware of this. Again this goes back to you reading those loan
papers before signing them.

The real estate market is a mess. So many people have wanted the
dream of home ownership at any cost. In many ways it's an illusion
that people are willing to buy into just for the opportunity of owning
a home. Values absolutely skyrocketed and and now ofcourse they have
to decline at some point.

My advice to you would be go easy on yourself. You made a mistake- it
happens. Try to refi and ask lots of questions. If you dont know
what to ask then utilize the internet to find out what to ask before
you refi. You may find that you dont want to stay in that home. Who
knows.

God Bless you and your loved ones.

No Barb, these people making $13-$14 per hour didn't cause you to lose
your home...YOU DID.

The fact that you're bringing in CHILDREN for a sympathy play is
ridiculous and idiotic.

You had all the time in the world to READ each document IN FULL, you
have that right. Yes, your credit is in the tank...and you have
yourself to blame.

Notaries in most states are not allowed to provide legal advice.
Their only function is to scan the document for any missing
information or blank lines. Witness your signature, get your ID and
perform the Notary act. The only person allowed to explain the
documents and the rate is your lender. This is probably why there is
such a Sub-prime mess right now and foreclosures across the nation.
Buyers were not asking questions regarding their loans.

I completely agree with the rest when it comes to your first sentence.
Absolutely out of line and for someone who puts people down for making
13 dollars an hour (which would be me) and calling them inexperienced,
you should be ashamed of yourself and you should have more respect
than that. But since you make more money than the rest of us, you
probably think you are smarter as well, you should know better than to
say "MORTGAGE RAPE!!! " Shame on you, I don't even wish to
read your letter, because I really feel that in this case it is
smarter for me not to fall on your level.

I read the first line to your letter & went no furthur. Totally
uncalled for comparing a problem with a mortgage company to a violent
physical assault!

I am very sorry for the situation that you are in -- the housing
market is in a major downturn in most areas and some people have been
significantly affected, yourself included.

With that being said, I think you need to accept the responsibility
for your current situation.

First of all, you put yourself into a very risky 2-year ARM. This may
have been one of your only loan options given a number of factors
including credit score, loan size, etc., but you accepted this loan
nonetheless. Also, you can fault the loan officer for not clearly
explaining the terms of the loan, the rate, etc. but at the end of the
day, you are the one that signed those papers. We're talking about
your BIGGEST asset -- you were purchasing a $740,000 home -- and you
should have taken the time to read through those papers. The interest
rate disclosure, good faith estimate, and truth in lending statement
all showed that this was an ARM and you signed them.

Secondly, you fault the fact that your home is decreased in value.
This is a risk that anyone takes when purchasing a home. In the long
run, homes' values typically increase, but in slow times like these,
you may lose out. That is why homes are typically viewed as long-term
investments. The bank will not lower your mortgage amount to
accomodate this as they would basically be throwing $250k out the
window. Again, that was the risk you assumed as a homeowner.

Lastly, as other people have mentioned, the expectation of a notary is
to witness the signing of documents. Notaries are actually not
allowed to explain these documents since a wrong explanation could
hold them liable. If you had questions or doubts, you should have
refused to sign pending clarification from the loan officer or an
attorney.

Again, it sucks that you are in this situation. It sucks that so many
people in this country are in this situation. I hope you are able to
work things out financially, but I think you need to re-examine what
actions led to this situation.

I am also with what used to be Wells Fargo, now Option One
Mortgage,owned by H&R Block and the Tax People. I have had my loan
since 2002 and we got into a financial bind and got behind 2 payments.
We have now paid 6 years, and they want more than our original loan to
pay off the home and I am scheduled for foreclosure on Feb. 14th,
2008. I have been trying to get a payoff since Nov. 2007 and every
time I try to talk to someone, they are in India or Mexico and they
tell me it will take 7-10 days only to wait and find out more trumped
up charges have been added. This is "Usery" and other names I won't
write on the internet, I am filing a lawsuit in Tennessee and I
welcome anyone who would like to be part of it.

"Restructure My Mortgage, Wells Fargo
by Barb S. - Posted Tue February 5, 2008 @ 12:00 PM

MORTGAGE RAPE!!! ..."

Excuse me? Bus driver? I'd like to get off here, please.

I find the part where you insult the loan people about their pay rate,
and education. Yet, they were able to apparently screw you over.
Hey, maybe THEY at least read what YOU sign. They may not be as
educated as you, but at least they pay more attention to detail.

blow your mortgage rape whistle??

Maybe my husband could get a job as a workout negotiator - he
certainly meets the qualifications. He'd make $3-4 an hour more than
he does now. In fact that's what he used to make as a real estate
title abstractor - until he was downsized.

I'm required NOT to give legal advice. If your notary had explained
the documents to you (not part of the job as a notary) they could be
accountable for you not understanding or miss reading the infrmation
and could be sued.

Someone's current salary does not reflect on their ability to do their
job. One of your main arguments is that these workers are incompetent
because of a perceived lack of education and low salary.

It sounds like you not only failed to read and adequately comprehend
the terms of your mortgage, you are more content to blame everyone but
yourself. If you can not afford a three quarters of a million dollar
home, then do not buy one.

Sadly, it appears you are a victim of the credit crunch and mortgage
blow up. Really, my credit got ruined by a divorce and I had stellar
credit prior to that. You need to accept life changes and move on.
There are plenty of people who raise their kids in properties that are
less than a million dollars and who have parents who make $13 an hour.
Stop being an arrogant and pompous human.

One word: cope.

So so sad!

I suppose any of us could open any paper nationwide and see the state
of both the stock markets and real estate markets in general. To sign
on the bottom line of a binding legal document is consent, to the best
of my knowledge, to agree to the terms. The rape reference aside, it's
evidently our responsibility to review and get answers before signing
anything. It may have seemed like a great idea at the time, but it was
before signing that research has to be done.

What does what a worker earns have to do with the problem? When
deciding to buy the home, do we research what the builder earns a
year? The electicians, plumbers, site planners, appraisers, loan
officers, government officials who register the titles, the person who
installs carpeting? No. We look at the end product and start from
there. The seller of anything will show things in the best light
possible.It's our responsibility as buyers to find the answer to
"What's the worst that can happen?" and "Can I do
anything to protect myself in the process, from assuming too much
risk?"

We buy according to the market. We ultimately decide which financing
option we go for, and any mortgage is a huge assumption of risk.

I do hope Wells Fargo can do something to help you, many lenders ARE
trying their best because they, too, stand to lose.

is signing a document without carefully reading it and asking
questions BEFORE you sign.

I'm sorry

Your interest rate is probably higher because your credit is bad, as
much as you don't want to admit it. Just admit it and accept it.

is people who OVERDRAMATIZE.

Bottom line, Barb, unless someone forcibly pushed you down and
sodomized you, don't EVER use the word "rape" on this
website to describe a situation like this ever again. It's tacky,
insensitive and wholly inappropriate.

Secondly, what kind of parent involves her twin 12 year old sons in
such adult concerns? Children shlould be allowed to be children and
we as the adults in their lives are here to protect them, not dump on
them. Shame on you for being so selfish and cruel to your kids.
& before you (or anyone else) says thats not the point of your
letter, let me remind you that YOU chose to include that comment in
this letter. No one else.

Thirdly, as others have said, you clearly have the capability to write
coherently, so it stands to reason that you should have been able to
READ coherently too!

Predatory lending has been running rampant for nearly a decade (maybe
longer) and if you were foolish enough to go into a mortgage signing
without knowing EXACTLY what you were agreeing to, then that's YOUR
fault. No one is going to hold your hand and read every clause and
line in the contract for you, honey.

But again, anyone who adds stress to their kids' back over this surely
can't be expected to take any responsibility for her own actions,
right?

A GFE is a good faith estimate of closing costs... these would have
been on your HUD-1.

The interest rate is in several prominent places on documents ~ the
Note, the Deed of Trust and the Truth in Lending. You shuold have
received a package at closing with your loan docs in it.

i just renewed my notary commission and I can tell you that the
notary's only responsibility is to ensure that it's you signing the
documents. If you wanted an explanation of items at your closing,
that was the job for the closing attorney.

I am also a real estate settlement attorney. I have closed hundreds
of loans and every time I have, I show the borrowr the pertinent part
of the Note/Deed of Trust/TIL that shows the interest rate.

There is never a 3 day right of recission on a purchase. Never has
been, to the best of my knowledge.

I am very sorry you are in foreclosure and are underwater, but Wells
Fargo isn't one of these predatory lending companies. What they do
(and what other lending companies do to make money) is buy and sell
paper. They bought your mortgage at its present value. They did not
originate your mortgage.

Furthermore, the housing market is in the toilet, thanks in large part
to predatory lending practices which convinced borrowers that 100%
financing and negative amortization were the way to go.

Good luck to you. Maybe you can find a company that will work with
you. You have 2 weeks... maybe another lender will. You will pay more
(higher interest rate) but maybe you can save your house.

I would LOVE to make $13-14 an hour!


READ EVERYTHING BEFORE YOU SIGN! YOU signed it. YOU pay for it.

Why would they possibly restructure your mortgage for $490,000 when
you borrowed $640,000 (or close to it)? You expect them to take a
$250,000 loss?

This is what happens when people don't use an attorney. For the life
of me, I can't understand why anyone, especially with so much money
and their homes at stake, would attempt to handle these transactions
on their own. So you saved some money by not using an attorney, and
look where it got you.

I was a notary, and I was never required to explain the contents of
any documents to the people signing them. I was only required to
witness their signatures and attest to that.

I feel sorry for you, I really do, but you were in over your head by
not fully understanding the terms you agreed to with your signature
and decided to go ahead anyway, and for that you must take
responsibility.

I'm sorry, Barb, but you appear to be blaming everyone but yourself
for the mess you find yourself in. When you purchased your home you
agreed to a price and signed loan documents of which both were of your
own doing - - no one was holding a gun to your head. And it doesn't
matter what the loan officer told you - - all that matters is what you
signed. If you didn't understand the terms of the loan, the time to
ask questions was before you signed. And a notary is only present to
witness your signature, not explain loan terms.

Your demand that your loan be restructed for almost 50% of the
original agreed upon value is unreasonable and just not the way the
mortgage industry works.

I wish you the best of luck but somewhere in this saga you have to
accept some responsibility.

Sorry, I couldn't get read any further than the word rape.

First of all, the fact that your property fell in value isn't the
bank's fault. You borrowed an amount of money, and the total amount
was given to the seller. That money is gone, and neither the original
bank or Wells Fargo has it. You are asking, essentially, for Wells
Fargo to give you the amount of market value your house has lost.
That is an absurd request, and reflects quite an ignorance on your
part. You needed a financial advisor to help you examine the
paperwork when you bought your house, apparently. The terms you
agreed to were on the paper you signed in the presence of the Notary.
The Notary authenticates your signature, and has nothing to do with
explaining the terms of the loan.

After the fact, you realize that you should have had a fixed rate loan
all along. It sounds like your knowledge has increased, but far too
late. That is the only type of loan I would ever agree to.

Was the practice illegal? If it wasn't, it wasn't, and bringing that
up is immaterial. Much like your assessment of the people who who
handle mortgage paperwork. Why not look in the mirror at the person
who needed to do more research before making such a commitment?

It should have come as no surprise at all what your mortgage rate was
in 2007, if you understood the terms of the mortgage. Clearly you
didn't. Again, this shows ignorance on your part. There is no one
else to blame for that.

I can't understand the terms of your loan totally, but two things
stand out. "Regular rate change 6 month 1.5%" and "1st
rate change 24 month 3%" Those two statements sound clearly like
increases that can or will take place. If your mortgage started at
6.99%, you should have expected it might go up 1.5% or 3%, even not
understanding fully how the changes occur. Also, there is a ceiling
of 15.95%! That should have been a scary number.

The banks are partially to blame for the mortgage mess we are in, but
the is nothing here that hides the fact the rate on this mortgage can
change. It was up to you to find out exactly how. The property value
change is completely unrelated to your mortgage. That is a risk you
took on when you bought the house.

Finally, Wells Fargo didn't issue this loan. They are the ones you
own money to, which is probably why you addressed this letter to
them.

Any merits of your issue aside, the term "rape" is only
going to get people mad at you. Second only, perhaps, to the n-word,
the word "rape" really inflames people.

You do yourself a disservice by using this word.

That said, it seems the gist of your complaint is that you had
inexperienced people working with you on your loan.

While this is a legit issue, why didn't you complain about this before
you signed your papers? I can't believe that an intelligent person,
like yourself, signed a single thing without reading it. Nor can I
imagine that you signed anything without getting an explanation, that
you were satisfied with, about anything that confused you.

When I purchased my last two homes, I had my real estate agent with
me. We also had a settlement attorney. Whenever there was a question
about the loan papers, I was able to ask my agent. Where I wanted to
be sure, I asked the attorney.

I suspect you've been hit with the problem many people have: you
signed papers that you didn't understand, for a house you really
couldn't afford, with interest rate escalation rates you didn't read.

Let's keep in mind that when your loan was purchased by Wells Fargo,
it was purchased as a legit loan. Why should Wells Fargo bear any
responsibility for how you were mislead by the prior lender?

Let me ask: did YOU know the property was overvalued? I'm assuming
no. I'm assuming that you had no agent or someone else trustworthy to
justify the price of the house. Right? I'll bet you never saw comps.
You saw a house you liked and paid the asking price (or thereabouts)
without satisfying yourself that it was a fair price, right?

Lastly, the fact that the property has gone down is not relevant to
the loan. In some areas, housing prices have fallen. A lot.

If this is your residence and you have no plans on moving soon, don't
worry about what the house is worth. It's irrelevant to you paying
your loan.

I have no idea why you think you can get a new loan for less money,
simply because that's what your house is now worth. You borrowed a
specific amount of money to buy the house from the prior owner (or
from a builder, if it was a new home). That amount was about $750K.
Are you honestly asking that Wells Fargo reduce your loan to $500K and
for them to eat the "$250K"?

In the end, I feel very bad for you and anyone else that can't make
their house payments. It's easy to blame you for not reading what you
signed. It's easy to blame the notaries for not knowing enough to
explain the load documents to you. It's easy to blame the banks for
wanting to make money (and stay in business).

You best bet is to (a) ensure you loan is current and (b) refinance at
a now-current interest rate, assuming that it's lower than what you're
paying. That won't lower the amount of the loan, but it may make the
monthly payments more reasonable.

If you simply can't afford this house, then you're either going to
need to find someone to give you some money or, sadly, move. It's
sad, yes. But no one should be carrying mortgages that they can't
afford.