Considering my very negative asset picture, my attorney was very surprised that I was sued, let alone for the full deficiency. He wasn't expecting that.
I think a paralegal from the lender's firm just Googled me, concluded I was a "business guy" (so, moneybags), and put me in the "probably can pay us" bucket. Oh, if only they knew how wrong that assumption is. This is one unintended consequence of having to present a successful image to the world for marketing purposes; it makes your creditors think you got Gs.
> I think a paralegal from the lender's firm just Googled me, concluded I was a "business guy" (so, moneybags)
That's a good guess imo. One side effect of the housing bubble is that banks decimated their loan-recovery units on the way up (because how would a loan ever go bad when prices are rocketing? You just force a sale. So lay off most of the recovery personnel.)
As a consequence, when the market went south the recovery efforts were second rate, which probably explains why the bank is wasting its time going after you. But you knew that. :)
Yeah, I just don't understand the justice of this scheme. Not to sound like I've got a grudge to bear or a sob story -- it is what it is, and I generally own my mistakes in life -- but, academically: I was barely 21 years old when I got the condo, barely six months at qualifying income history, < 24 months of credit history, hardly any money down. I was definitely a beneficiary of Bubblicious underwriting conditions.
With the proviso that nobody foresaw the housing crisis in its eventual form, how is it reasonable to impute 100% of the risk for the real estate market going south on me? Who had the macroeconomic models and computers to evaluate the property risk? The bank. Who ended up with the actual condo in hand, in the end? The bank. Who had the actuarial data to evaluate me as a borrower? The bank. Who got 6.5% APR on one loan and 8.25% APR on the other for 6-7 years? The bank.
So, why is it that the bank gets the upside of all of that, and I just get a $55K lawsuit? I would not dispute the notion that I should bear some risk for the value of the collateral, but, all of it? How does that make any sense?
> With the proviso that nobody foresaw the housing crisis in its eventual form
Believe it or not, there were a bunch of us that did and took action. See The Big Short for some other examples.
Of course, nobody with a conflict of interest managed to see it (Ben Bernanke, Fed Chair, Mark Zandi, Economist at S&P which was rating the trash AAA).
That you can miss predicting the biggest economic event in three generations and still have a job as an economist is a testament to how broken that field is.
> How does that make any sense?
Absolutely zero. And the fact that nobody is doing time for what happened is itself a crime.
Yeah, well, sounds like you and I go on the same rant. I'm not even ranting because I'm an aggrieved deficiency defendant; it's just the principle of the thing that offends me, if you can believe that, utterly unrelated to my personal financial liability. Nobody in my position should be getting boned from all sides simultaneously when the banking sector, enabled by the easy-money Fed, caused the whole phenomenon.
Of course, an aggravating factor in this case is that Atlanta was understood to have a massive glut of condo development even before the subprime price collapse. That's why condos in Atlanta still haven't recovered to anywhere near pre-crisis levels, unlike freestanding houses. As of last summer, my unit was worth 48% less than I paid for it. The point being, I was paying $1400/mo in mortgage (mostly interest) (+$300-$400/mo in HOA dues!). A qualified buyer can finance my place for $85K at like $350/mo now! :-) And I'm the one getting sued.
I think a paralegal from the lender's firm just Googled me, concluded I was a "business guy" (so, moneybags), and put me in the "probably can pay us" bucket. Oh, if only they knew how wrong that assumption is. This is one unintended consequence of having to present a successful image to the world for marketing purposes; it makes your creditors think you got Gs.