i used to do these all the time"This loan is an example of what went wrong in America," said Tom Domonoske, a lawyer on contract for the Virginia Legal Aid Justice Center who is representing Donald Naill in the lawsuit against the broker, Lincoln Mortgage. Through the lawsuit, Domonoske obtained documents showing how the loan was put together.
The Naills first refinanced their mortgage in 2005, when Lincoln Mortgage, which had been recommended by a friend, cobbled together an unusual deal. The Naills owned another house in Mineral (a town of under 500 people about an hour from Richmond) where one of their grown sons lived and paid rent. To inflate the size of their new loan, said Domonoske, the broker had the Naills borrow to pay off the $138,000 mortgage on their son's house and pile the debt onto their own house, on which they owed less than $50,000.
The Naills wound up with one much larger $250,000 mortgage, the additional debt either covering other liabilities or providing cash. Virginia Naill said she does not remember exactly why she refinanced the way she did or what she got out of it. All she remembers is that it was a snap.
"A friend told me about Lincoln Mortgage and she took me over to meet 'em," said Virginia Naill, "and then one lady called and got some information and said, 'Come in and we're gonna close 'em.'"
Domonoske, the attorney, called the arrangement "bizarre."
"I've just never seen any transaction where they refinanced a loan from another piece of property without also taking a security interest on the other piece of property," he said. But there was nothing bizarre about why the broker wanted to do it that way: "The broker added that other one to inflate the size of the loan so they could get a higher commission."
Read more at: http://www.huffingtonpost.com/2009/11/04/this-loan-is-an-example-o_n_320388.html&cp
the interest rate on investment properties
is higher than on owner occupied properties
so if you have enough equity to pay off
the rental property in your primary residence
your interest rate and your payments go down
this lawyer is either retarded or
just trying to score points with
an ignorant populace condemned to
stay that way because of
lazy and or stupid journalists
not that the illiterate lady and her husband
didnt get screwed
but it didnt have anything to do
with the above
