socialmedian: "This Loan Is An Example Of What Went Wrong In America"

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"This Loan Is An Example Of What Went Wrong In America"

Source: The Huffington Post | Full News Feed

Nov 04, 2009

Summary

Last December, Virginia Naill learned that the monthly mortgage payment for her three-bedroom home on Ordinary Road in tiny Mineral, Va., would jump by hundreds of dollars.

"I started crying," she said, "'Oh no, what did I do?'"

In 2006, it turned out, she'd unwittingly gotten herself into an adjustable-rate mortgage with a two-year teaser rate. As a result, in December, the interest rate shot up from 7.5 percent to just over 10.1 percent, and the monthly payment on her $280,000 loan went from $1,800 to more than $2,300. She and her husband didn't know how they were going to pay it.

Naill, 50, thought she'd refinanced into a fixed-rate mortgage. Back in 2006, that's what she'd told the broker she wanted. But she signed the documents that were put in front of her, and what she got was a case study in irresponsible lending -- a debt trap that even the broker has admitted was based on a fraudulent application.

Naill works at a Wal-Mart distribution center. Her husband, Donald Naill, is a roofing contractor. "They knowed me and my husband were illiterate, that we

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