The real estate articles by Law Professor White of the University of Arizona brings up a concept about the home financing contract you signed that makes sense to me.
You signed an agreement that gave you two options. Both spelled out very plainly.
You could use the payment option and pay as specified, which you had noted was written right into the legal contract and that is what you have been doing.
The contract also spelled out that there was another option, the default option (stop paying) that you could choose at any point, and the home would automatically (almost) revert to the lender.
Now, conditions have changed and you have decided to switch to option two, which is clearly spelled out in the contract.
The lender knew that option was in there when they themselves wrote it up and financed the home, they signed off and agreed to give that option.
In Arizona, they and you knew it is the law that this is the two options, there is no further obligation on you the buyer when you chose option two, the default (stop paying) it automatically then reverts to the lender. The lender knew this when they financed the home for you.
There is nothing in the contract that says they have the right to punish you for choosing at some point to switch to option two and there is nothing in Arizona law that says they have a right to threaten any or put into affect any other punishment
Never the less, they will threaten you with ruining your credit if you switch or at some point choose option two. There is nothing in the contract or state law that gives them the right to do this.
It would seem feasible that those that have had this done to them, could ban together and file a class action for damages for this threat and the lender to taking steps that in effect wind up actually ruining of their credit and the resulting effects of this loss of credit availability, thereby doing them great financial harm.
Charge in the class action that the mortgage companies have conspired together to arbitrarily punish any home buyer that decides to use option two, discontinue the payment option and exercise the option for the home to revert to the lender.
That mortgages companies have conspired together to deny new mortgages for up to seven years, anyone that has considered it prudent to use perfectly legal and reasonable option two in their mortgage agreement from any other lender, that they notify each other so that no one that uses option two can get credit from another mortgage lender.
Thereby denying normal access to new mortgages to buyers that have excellent credit but have made a decision to use option two as just good business operation.
That they have a right to do so to not be extorted and pay out money they would not normally do so but to relieve this conspired, threat.
The effect of this conspiracy is to force by this threat paying millions of dollars to mortgage lenders to keep them from making good on the buyer losing access to credit for seven years thru this joined together to achieve a mutual threat to keep buyers in line and force payment when it makes no logical sense to do so from a business standpoint.
Rental Investors, Walkaway Forum Talk HereDisclaimer:
Author is a long time reporter publisher, but has no real estate or tax expertise or qualifications, is a real estate investor with 14 homes, six underwater. and many with 7% loans, and running a deficiency of $5,000 per month in the rental home business. Supplying a forum where fellow investors hung out to dry can discuss options. Reporting here is research and from seeking legal council on personal situation in Arizona.(See Continued Disclaimer Bottom of Page.)
Related Articles:
