Bloomberg.com: Exclusive
If something like this happened to you or your seller and they are now looking to do a short sale, have them speak with a lawyer. There may be a great deal of leverage for the homeowner.
here is a quote from one of the pitchmen.
Making the Pitch
Afghani says sales pitches typically focused on what a borrower could do with all of that money rather than on fees buried in paperwork or annual interest rates as high as 10.5 percent at the time, at least 2 percentage points more than the rates that banks charge people with good credit.
``Even with explanations, most borrowers didn't really understand what types of loans they were getting,'' says Maureen McCormack, another former Secured Funding employee. ``They just cared about the monthly payment.''
The sales job was made easier with exotic mortgages such as so- called no-doc loans, which enable borrowers to get loans without having to supply evidence of income or savings, and option ARMs, adjustable-rate mortgages that let people pick how big a payment they will make from month to month. The loans offer upfront teaser rates at the cost of tacking the deferred payments onto the balance of the loan.
``Heavy sales pressure has been part of the most-egregious lenders for a while,'' says Kurt Eggert, a professor at Chapman University School of Law in Orange, California, who has studied the role of aggressive sales tactics in subprime lending and sued lenders on behalf of elderly borrowers caught up in home equity scams.
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