Posted on 08/13/2007 5:29:02 AM PDT by Hydroshock
SAN FRANCISCO - When Linda Martin refinanced the mortgages on three different houses nearly three years ago, she thought the lower monthly payments would help her save more money for retirement.
Instead, the Lakewood, Colo. skin-care specialist is sinking in financial quicksand amid a widening mortgage morass that’s pulling down home prices and threatening to drag the U.S. economy into a recession.
“I’m hanging on by a thread, not knowing whether I am going to be living in a car in six months,” said Martin, who declined to reveal her age.
Martin is among the hundreds of thousands of borrowers saddled with “option” adjustable rate mortgages, risky loans that dangled bargain-basement introductory payments and also let borrowers defer a portion of interest payments until later years
(Excerpt) Read more at msnbc.msn.com ...
So Linda saw a few episodes of ‘Flip this house’ and decided she was going to get rich quick and be a real estate baroness. Woops!
Woops on us as we bail out the banks and these real estate tycoons.
To be fair, “Flip This House” shows losers too. But being humans, what everybody remembers is the bonanza episodes.
An old rule of thumb about gambling comes to mind: "If you can't afford to lose the money, then don't gamble."
My heart goes out to all those people who own three times as much real estate as I do and want me to help them pay for their holdings.
Martin says she would have never refinanced if a mortgage broker hadn’t misled her about how the new loans worked — a frequent complaint among borrowers with option-ARMs.
It's always someone else's fault.
seems like a whole lot of boo-hoo over a very small percentage of the market....
Yes, but our wonderful MSM would love to de-stabilize the market and show it as a Bush policy fault. Whenever they can they will.........context be damned.
A fool and her money.....
The same thing, over and over again. Just the names and asset classes change.
What is with all these quotes from people who “didn’t understand” that when their monthly payment got cut in half but their interest rate stayed the same, they were probably not paying down the principal in quite the same way??
I can’t fathom the idea of taking on a six figure liability without taking 30 seconds to plug the numbers into a loan calculator to see if they make sense. Nor can I feel particularly sorry for those who fail to do so.
Hillary will be presented as the savior who, with her financial smarts and options trading, will fix all of this. The day after the election, no more stories about the homeless, no more stories about the morons who financed 750K without knowing what they were doing.
His father bailed out the Savings & Loan industry. This Bush may bail out the Mortgage industry.
I do not feel sorry for her one bit.
Amen! I live in an apartment because that’s what I can afford while saving a big down payment for a house. I have zero pity for the idiots who took out option ARMs and opted to make interest-only or negative payments on several homes in markets that are flooded with real estate for sale, and then they want ME, the taxpayer, to bail them out? They can go jump off a bridge.
As low as interest rates have been, there is no reason
for anyone to get an interest only loan.It’s just nuts. People just refuse to live within their means, and think they have to have homes way out of their price ranges.
Before I became disabled, I sold real estate and unless the rate was at the 10 or 11% range, I almost always told people to get a fixed rate, or do a 2-1 buydown, where they would know exactly where their interest rate would be in 3 years.A few people who didn’t plan on staying in their house very long opted for arms when rates were at 10. Some of them refinanced when rates went down and it worked out well.I would have rather not made a sale than to have people in financial trouble down the road.
As low as interest rates have been, there is no reason
for anyone to get an interest only loan.It’s just nuts. People just refuse to live within their means, and think they have to have homes way out of their price ranges.
Before I became disabled, I sold real estate and unless the rate was at the 10 or 11% range, I almost always told people to get a fixed rate, or do a 2-1 buydown, where they would know exactly where their interest rate would be in 3 years.A few people who didn’t plan on staying in their house very long opted for arms when rates were at 10. Some of them refinanced when rates went down and it worked out well.I would have rather not made a sale than to have people in financial trouble down the road.
Option ARMS are quite clear if you read the paperwork.
That is one of the problems, the majority of Americans are legally and financial illiterate. I would always have all the paperwork on a closing reviewed by a lawyer who worked for me. And I was a realtor way back when.
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