There were some unasked questions and possible inaccuracies in today's Newsday story about Mortagges Foreclosures [Their 2nd chance].
The article says that the couple had an adjustable rate mortgage for 11.625% and that it “would reset at least at 6.375 points higher every August”. There are several things wrong here. First, that level of adjustment would put their annual interest rate at almost 200% by the end of the loan term. That just has to be wrong. Second, the 1 year adjustable rates at the time of their loan were about half of the 11.625% that they received. Why did they get a rate that was twice the market rate at the time?? (Previous defaults? no down payment?) Why did these people select this loan over other available options?
Iy also notes that there were “as much as” (whatever that means) $119,330 in “questionable” (whatever that means) late fees. Your inset box shows that this is made up primarily of $95,154.65 which was almost 2 years of interest. Interest is not a late fee. It is interest that is part of payment required when you get a loan.
Most similar stories miss several background questions that would be relevant to the story. For example: Was a cash-out refinance? If it was, where is that money? Did they ever have a chance of carrying this loan? If not, why did Emigrant make the loan in the first place?
Kicking financial institutions is currently populist hobby and there is no doubt that lenders/brokers that committed fraud should be prosecuted. But there are two sides to every story and Newsday's consistently inaccurate reporting does not help to identify what went wrong.