Ofcourse there is an alternative-the free market!
The whole thing sounds like a bunch of financial voo doo to me. However I was strictly raised to buy only what I could afford and definitely not rely on credit.
>>Ofcourse there is an alternative-the free market!<<
Yeah sure. Show me the investor/bank that is going to hold a 30 year Fixed rate $500,000 whole loan (mortgage) in their portfolio. And if he is, how many can he stick in that portfolio until he runs out of money? You can’t.
But the “free market” hold a say, a 6 month fixed rate mortgage. Only one small problem. The homeowner has to find $500,000 within 6 months to pay off the first loan.
Again, we are talking about “conforming” loan limits, middle class type loans. Not the Jumbo loans where the Govt. does not play a part. A small segment and usually much more limited options for borrowers....i.e. ARMS only, much higher rates, prepays, etc.