> Some people might scoff at the ideas in the article. You took out a loan, only a deadbeat leech would default on that loan and expect to keep their house. Sounds about right, but that assumes we live in the world we all imagine. The "right" world, where business still resembles interpersonal relationships. It doesn't, and we don't live there.

We know that at the end of the day, a loan, insurance, utilities, etc. are all business contracts. Each party signs something, and each party expects what they signed for. The problem is that contracts (especially when buying a home) can be absurdly long full of unintelligible language. So we as ordinary people want to believe that we aren't going to get screwed over. We know that these major companies have the manpower and funds to ruin us, but we hope it doesn't come to that. From that same user[0]:

> You've paid your insurance bill diligently for years, but as soon as they are needed, they start looking for ways to get out of paying the claim. They will happily screw you over the tiniest technicality. The insurance industry certainly isn't the only offender in that regard.

It's a business transaction. Some of the time, we don't even have a choice with who we do business. But as an ordinary person, I don't want to get fucked over by these forced contracts.

[0]: https://news.ycombinator.com/item?id=17810765

I know about all of the non conforming and other crazy loans taken out back during the real estate bubble pre-2008. I took advantage of most of them as a real estate investor and did many of the shady things myself that help cause the real estate bust and did a few “strategic defaults”.

While there is a lot of paperwork, for the traditional fixed rate mortgage that most people should be doing, it’s not that complicated- you pay your mortgage every month, the escrow amount may fluctuate but besides that it’s fixed, to whoever owns your loan this month, you keep your house.

Most people had no business doing the adjustable rate/ negative equity/no doc type of loans. I agree that mortgage lenders, especially those working with builders, pushed people into them.

You're right, but I'm not just talking about the subprime issue. It's bigger than that with numerous companies providing different goods and services. We're beholden to a number of service contracts that are stacked against us. For example, I was stuck with a terrible ISP. Daily outages, constant resets, and times in off-peak ours where my throughput was absurdly low. No matter how much I called and complained, there was nothing I had in my favor, because the speeds "may fluctuate from time-to-time due to the nature of the service". My choices? Pay double for ADSL or put up with it.

According to the contract, they're not obligated to give me 100% uptime with 100% of the bandwidth as advertised. That's understandable. But there was clearly an underlying issue with the infrastructure that was not being addressed. So contractually speaking, they can give me hand-wavy answers about why they can't give me complete uptime and throughput with no repercussions, but as the customer, I must pay my bill in full by the due date.

[1] I’ve got to give a shout out to AT&T and BackBlaze, I just changed my Plex Server over to a new computer and my entire 1.7TB collection was uploaded in less than 3 days. I was getting speeds between 500GB per day and 1Tb+ a day.

wow so you're a real piece of shit.

https://news.ycombinator.com/newsguidelines.html

7 So when they continued asking him, he lifted up himself, and said unto them, He that is without sin among you, let him first cast a stone at her.

If you're fine with someone using the technicalities of the contract to strategically default then you should equally be fine with someone using the weird system of title transfers that the banks use to their benefit in one's own favor.

One of the pieces of paper I signed with a very clear explanation that the mortgage company I was using sells “100%” of mortgages within 90 days to other banks. You don’t just sign mortgage papers blindly. The closing attorney describes every piece of paper you sign.

I think, from a consumer perspective, the answer here is the originating bank of the loan should be responsible for the lifetime of the loan for servicing it, even if they sell the debt itself to another party. This simple act would simplify immensely the process for the consumer and probably put a bit more pressure on the banks to get the paperwork right.

The first letter you get is from your current bank.

How many have automatic payments setup that would just stop when the loan is sold?

I think I would notice if my largest bill wasn’t deducted from my bank account.

But at the end of the day, the bank doesn’t want your house. They don’t want to go through the trouble of foreclosure, for being responsible for maintenance while it’s being sold. They don’t want to go through the hassle of selling your house.

You will get letters, phone calls, notices, court dates, etc before your house goes into foreclosure. I doubt that people are sending thier payments to the wrong place long enough to go into foreclose.

Where in that letter can I say "I object to this transaction"?

Where in that letter can I say "I will be emotionally and/or financially damaged by this transaction"?

Where in that letter can I tell the bank that the new bank does not personally know me and I do not believe it can fulfill the obligations to Know Your Customer?

If the chain of trust is violated then all breasts are off. There is no harm in ensuring that you are the one who benefits as opposed to being hosed if that happens.

What do you do when it's literally not possible to determine who owns your debt. That can be an enormous risk for you to take on though no fault of your own. A perfectly valid legal remedy for a court is to force the entities who messed up their record keeping to open the mistake interest of you.

I don't have much sympathy for people who borrow money to then find some loophole to swindle their way out of their debt. They succeeded? Good for them! Proud to be dishonest. Let the other borrowers pay for you through higher margins.

There's a lot of mechanics that go into paying my debt, is it automatic withdrawal? If so how do I change the account? Is it someone I can barely hear in a noisy call center I get to talk to after an hour? Or is it someone at the bank around the corner where I first opened my account when I was 14?

I've got a mortgage, they've got a fine UI for logging in and making a bonus payment, printing out amortization schedules, etc. etc. If they sold my debt to someone who would only talk to me via fax I'd be pissed off.

That’s the thing. You don’t own the debt, the bank does.

There's a lot of mechanics that go into paying my debt, is it automatic withdrawal? If so how do I change the account? Is it someone I can barely hear in a noisy call center I get to talk to after an hour? Or is it someone at the bank around the corner where I first opened my account when I was 14?

I don’t let any company have direct access to my bank account. I pay my mortgage and all of my other bills using bill pay from my bank. When the letter comes saying the mortgage has been changed, I log into my account at my bank and change the bill pay. A mortgage is one of the easiest transactions.

Looked at through this light, there's a strong ethical argument that no agreement was made, as very few single humans are informed enough to have the capacity to genuinely consent to an agreement as complex as a modern mortgage.

I remember one of the most explicitly explain parts of the home was the title.

“Injury liability”? You are required to have homeowners insurance and if it’s not good enough to satisfy the loan, they will make sure you know it. While pre-2008, I had loans without an escrow that paid the insurance. They are a lot stricter about it now.

Maybe you have a better chance at getting the idea of it because you are more techie, and you know some legal jargon.

But to most people, an EULA is complete and utter gibberish. To some people, a 30-year fixed mortgage is utterly meaningless gibberish.

Yeah, you can sign on the line, but it's not any more informed consent than what most people do when they click okay before they log in.

I have read them. There are a lot of pages, but it's pretty straightforward. (The escrow agent just sat there impatiently twirling her pencil and sighing, but she never said a word.)

If you can't read them, or can't understand them, hire a lawyer to do it for you, check for any hanky-panky, and explain it to you. It's worth a couple hundred bucks to protect your 6 figure investment.

That's because you're probably 1 out of 100 that actually bothers to read and understand all of those documents. Your own realtor doesn't understand those documents and the vast majority of home buyers do not hire their own lawyer to check all of the documents and contracts they sign when buying a home. Whether it's worth it or not to actually read all of those documents and have a lawyer review them before signing or not, that's not what happens in the vast majority of cases. It's not an understatement that the majority of home buyers do not understand all of the obligations of their mortgage.

>One of the papers you sign when getting a mortgage is one that says simply "I have read and understood all these documents."

And I'm sure the EULA that everyone always skips says the same thing. That doesn't change the fact that almost no one actually has read and understood all of the documents.

BTW, I didn't have a lawyer review them. But they are not hard to understand. Probably a century of lawsuits have shaped their contents, and they are shaped by judgments against the authors of them when they are ambiguous or confusing. In fact, they're fairly standardized.

I've never had trouble with mortgage documents, but I have had trouble with car loans, repeatedly. The terms we verbally agreed on were altered in the final document, always significantly in the lender's favor. I always make them fix it, and they'll lie and say those were the terms we agreed, or those terms are their policy, or those changes are immaterial, or they don't have the time to fix the documents, all kinds of crap.

I.e. it's not that the documents are hard to understand, it's that they slip altered terms in them.

I’ve also never had an attorney sitting by me for an hour explaining each paragraph before I signed the EULA.