On 9 Oct 2012
One-third of people say strategic defaults are acceptable,
Call it Crazy says
But back to the OP, is it the bankers FAULT if a home buyer signed documents and mortgage notes they didn't understand?
To all the know-it-alls on here who have never held a mortgage... My last mortgage note (refi) was 83 pages. I asked for a copy in advance, as is my right under law. The lender was not happy about that and tried to talk me out of it. I read every word, some pages multiple times. I found 3 errors. I had some questions about things I wanted explained. Try to do this at the closing table. They will have to allow it, but will pressure you to hurry up.
We delayed the closing to correct the errors. That would not have been a realistic option if this had been a purchase. Closings for purchase often have a domino effect. One person can't buy unless the current owner sells. If one closing is delayed, multiple closings may be impacted.
My brother's experience some years ago... he refi'd his home and specifically stated he wanted no prepayment penalty because he intended to refi again if the rates went down. Broker assured there would be no prepayment penalty. On the first closing date, the papers included PPP. Brother sent the broker back to redo the paperwork and they rescheduled the closing. Second closing date, same problem. Brother asked broker if he thought brother was stupid. Sent broker back to correct the docs. Third closing went through.
My point is it takes far more diligence on the part of a borrower than should be required when signing mortgage documents. You have to study them and understand them. I can absolutely understand that many people signed docs that had clauses they did not know about. The docs are complicated and brokers lie.