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Foreclosure Doesn't Mean Honest Mistake

Should someone have a leadership position in Connecticut who "forgot" to pay his mortgage and went into foreclosure?

When a foreclosure is started there is good reason. That means someone hasn’t paid their mortgage for some time period, normally many months. How do you just forget to make your mortgage payment?

I’m very concerned about someone that is going to have a leadership position in my state that just forgets to make rent or mortgage payments. There is another problem, how does someone get a home equity loan, with credit that has gotten trashed, as a result of a foreclosure. Are you telling me that Webster Bank will do a mortgage for someone that has had a recent foreclosure?

If that is the case, there should be people lined up at every branch. You know the old saying, “It is not what you know, but who you know.” I guess Chris Dodd and Chris Murphy know people.

Check out this article with the facts regarding Chris Murphy's foreclosure:

Connecticut Senate hopeful Chris Murphy faced ’07 foreclosure By The Associated Press

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Sharon Pealer September 11, 2012 at 10:52 PM
Jim, from an article in a 2008 realtor magazine, if you will: http://www.ehow.com/how_4602244_approved-home-loan.html Credit was not as easy as you believe in the time in question according to this article, in fact credit is much easier today than it was then.
Jim G. September 11, 2012 at 11:12 PM
With all due politeness, nonsense. One article in an RE magazine doesn't contradict the reality we all lived through. RE lending was completely insane in 2007-8 and for every kindly, well-intentioned article that may have appeared there were a thousand people clawing their way into a mortgage they did not quality for and could not afford... and the banks were falling all over themselves to issue them. There is simply nothing unusual about Murphy's case, and anyone who's going to use these two incidents as reasons to vote against him needs to check their own past and that of friends and family. I'm not voting for Murph myself, but it's not because of trivialities five years ago.
Sharon Pealer September 12, 2012 at 03:49 AM
Jim, I suspect that you may be confusing time here. I agree that there was a time when far too many people got mortgages that they were far from qualified for, but that was before the time in question. I do have a child who has worked in mortgage processing and another family member who was and remains higher up in that industry. This is the time frame when many in the industry were being laid off and offices closed or consolidated because credit dried up. The crisis hit in the early Fall of 2007 and by 2008 was in full overdrive. Before that time, oh yes I do remember conversations about how could mortgages be getting approved with low doc or no doc. I have also checked on some of the names of "experts" claiming there is nothing there. They might be more believable if they did not show up as major donors or heads of PACs that donate strictly to Democrats.
R Eleveld September 12, 2012 at 05:00 PM
I was a collection manager many moons ago, generally a bank will start foreclosure proceedings AFTER an account is OVER 90 days old (missing a minimum of 3 mortgage payments). Then the process starts with a Lis Pendens (or a notice of intent to foreclose). Banks DO NOT want to foreclose (there is an exception), it IS an expensive option, and there are several risks to the bank. Murphy then made some sort of an agreement with the bank that stopped the proceedings. What I find interesting is with missed mortgage payments the bank extended him credit within 2 years I believe, and that is a little unusual since his FICO score would have tanked with the missed mortgage payments, and we could presume other missed debt payments. There is in fairness a possibility he had a low Loan to Value at that moment and rates were low I believe in the 5% range at that time. You can look up articles that indicate rates of 4% to 6%. Then again he may have had a deal with someone higher up within the bank, that allowed him to miss some payments, yet the automated bank systems kicked in and pushed the foreclosure along by accident. Something is not right, and Chris should just come clean and be done with it and get onto the real issues: How do you plan to reduce the deficit, enemy #1, and get people back to work, problem #1.
R Eleveld September 12, 2012 at 05:10 PM
The exception noted above is the back stopping of debt by regulatory or governmental agencies. These 'devices' backstop the mortgage or debt at face value and not another lower value. Banks can refinance, however the backstop is only on the specific instrument and not a future (refi'd) instrument. If they foreclose they get the backstop value. This makes a foreclosure in the best interests of the bank as dictated by the backstop.

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