New Mortgages Worry Regulators

http://www.washingtonpost.com/wp-dyn/content/article/2006/06/09/AR2006060900027.html ^ | 6-10-06 | Kenneth R. Harney

[Hydroshock]

Ping

[P-40]

Too few borrowers, they say, really understand the risks involved and have a solid grasp of how the loans work.

Plenty of free information out there on the pros and cons of these mortgages...so if someone does not know the risks before they sign on the dotted line...it's their own fault. At some point life may let them know what the risks were...

[Hydroshock]

Agreed. I know the risks and that is why I would never buy a house that I could not put at least 10% down and afford 125% of teh total payment.

[Rakkasan1]

guess you won't be a sucker for "predatory lending".

[Hydroshock]

I would pay 20% down if I could. In a few years hopefuly I can.

[HamiltonJay]

Neg Am loans today... foreclosure tommorrow.... I love it.

[Hydroshock]

Truth hurts

[elmer fudd]

Buying at the height of a bubble with negative amortization; can you say "bankruptcy"? There are going to be a lot of lenders left holding the bag when this whole thing falls apart.

[Hydroshock]

My thoughts are the lenders will scream for a bail out, like the savings and loads in hte late 1980's.

[AbeKrieger]

Just remember, should a company sell one of these loans to a minority, and said minority defaults, that will be de facto proof of racist, predatory lending. Seller beware... apparently entering into a binding legal contract does not have the same ramificvations of your claim "ignorance" or "victimization".

[P-40]

can you say "bankruptcy"?

It will be interesting to see how the new bankruptcy laws factor into all this.

[Hydroshock]

One of my biggest complaints about schools these days is they do not teach squat about being financially responcible and prudent. To many people do not know enough to make an informed decision.

[Hydroshock]

It will be a shafting of epic proportions.

[linda_22003]

I learned that at home, not at school. Of course, perhaps schools should be teaching it now, since so many parents are not capable of teaching fiscal responsibility themselves.

[gieriscm]

Last year I refinanced my home w/ cash-out to pay off a loan on another piece of property and to cover upgrades to my home. I took a fixed-rate 5.5% 30-year loan, but the loan officer REALLY tried to push me into one of the 5/25 "interest-only" loans, where you don't pay any principal for the first five years. I asked to see an amortization schedule for the whole loan and they wouldn't provide it. I walked away.

[aShepard]

Of course, as these borrowers go bust, and the mortgage firm takes the losses, it's all the rest of us that will wind up paying for the sucker loans!

[CORedneck]

They teach you how you can borrow money to buy all sorts of things but nothing, nada, zippo about using money to invest and have it work for you.

One of my biggest complaints about schools these days is they do not teach squat about being financially responsible and prudent. To many people do not know enough to make an informed decision.

[Fruitbat]

At some point life may let them know what the risks were...,/I>

You'd think that they could apply that across the board to where people live too, i.e., flood, hurricane, landslide zones, and have the same principles apply. Yet...

Gimme, gimme, gimme...!

Anyone concerned about these morgages can't possibly have missed the push to get as many Americans as possible to buy homes. Commercials explaining how more people own homes now than ever before, along with the designed means to make it all happen/bring it to fruition, can't possibly have been missed.

[petercooper]

One of my biggest complaints about schools these days is they do not teach squat about being financially responcible and prudent.

Parents should be teaching this, not schools.

To many people do not know enough to make an informed decision

You can't legislate ignorance or stupidity.