[Petronski]

...on the large loan, the rate was fixed for only two years, and after that it was variable...

And yet both borrowers and breathless "journalist" cast this as some huge surprise.

The reality is that the borrowers were supplied with a Note and Truth-in-Lending which outlined (a) how the rate could adjust, (b) when it would first adjust, and (c) how to calculate the adjustments.

In short, the "journalist" is sexing-up the drama to sell papers, and the borrowers are quite dull indeed.

[stephenjohnbanker]

"The reality is that the borrowers were supplied with a Note and Truth-in-Lending which outlined (a) how the rate could adjust, (b) when it would first adjust, and (c) how to calculate the adjustments."

Of course, you are correct, Petronski. But my experience with RE borrowers is that they get a bit giddy and euphoric, and have a tendency NOT to read the fine print.