[RobRoy]

check out this:
http://news.google.com/news?hl=en&ned=us&q=mortgage

And this:

http://news.google.com/news?hl=en&ned=us&ie=UTF-8&q=foreclosures

We are indeed living in interesting times,but not as interesting as the next year will be.

[Reaganesque]

Al Gore will be pleased. Think of the reduction in carbon emissions!

[scan59]

Today her monthly repayments have soared to 2,800 dollars, yet she only takes home 1,600 dollars.

She should've bought a smaller house.

[noexcuses]

That's exactly what Edwardsen did, remortgaging her home three times between 2002 and 2006.

Each time she got into difficulties, her mortgage broker would offer a new deal. From an original loan of 103,000 dollars, she now owes the credit company some 285,000 dollars even though her monthly income has remained the same.

The article doesn't say why she needed $162,000 over 4 years.... that's $40K per year! What was she spending it on? How much is her house worth now if it was in the family forever? Can't she sell it? She hasn't had a pay raise in 4 years? Too much information left out....

[frogjerk]

Talk about hype and hysteria!

I just heard a report that mortage applications are up because of the low 30 year fixed rate of about 6%.

[layman]

Today her monthly repayments have soared to 2,800 dollars, yet she only takes home 1,600 dollars.

Scratching head ...

[sr4402]

"People don't understand that the loan is going to go up after two years," said Eric Halperin, director of the Washington office of the Center for Responsible Lending.

Bulldukey. When you sign, you have to sign the Federal Truth in Lending Law, which means you are told what will happen to the rates according to your loan. Folks don't listen because they don't want to hear it - they don't count the costs and get caught. Bankruptcy due to these adjustable rates was a foregone conclusion and now that it is happening, do you think the industry will change itself? No Way, Dude...

The problem will have to get so bad that the states and or the Federal government will have to outlaw adjustable rates. This is because, behind each bankruptcy are citizen(s) and families in trouble.

Fools and the Fools that follow them: Obi Wan Kanobe

[goldstategop]

If you have an ARM, Welcome to ARM Hell.

"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelologus

[John123]

Wow!

The Feds are between a rock and a hard place. On one hand, they could bail out the lenders at taxpayers expense OTOH, they could reduce rates to alleviate the mortgage crisis. However, that may allow inflation to get out of control.

What to do?

[ex-snook]

Thank you Washington. Had enough of the cheer leaders singing 'Our Great We Art'?

[D-Chivas]

"Blinded by their own greed and the incredible amount of money that was being provided by Wall Street, mortgage companies were making loans that were abusive," agreed Ira Rheingold, of the National Association of Consumer Advocates which has taken up Edwardsen's case.

Some companies were filling out false applications to ensure the credit was agreed. In Edwardsen's case, she became a doctor with a monthly income of 6,000 dollars.

Having been through the mortgage approval process, I find it difficult to believe that Ms Edwardsen isn't part of the fraud that occurred here.

[thackney]

As rates soar

soar ????

............ 30 year FRM.... 1 year ARM
3/4/2005..... 5.79............. 4.14
9/2/2005..... 5.71............. 4.48
3/3/2006..... 6.24............. 5.34
9/1/2006..... 6.44............. 5.59
3/2/2007..... 6.18............. 5.49

Historical Mortgage Rate Data

[AD from SpringBay]

Hey Sharon Edwardsen - thou shalt not covet.

[A Balrog of Morgoth]

She is among 2.2 million people across the US who risk forfeiting their homes by the end of the year as they struggle to meet monthly repayments swollen by rising interest rates, and triggering fears that a financial crisis could sweep US lenders

Darwin's Law apparently applies even to the housing market.

[N3WBI3]

"Blinded by their own greed and the incredible amount of money that was being provided by Wall Street, mortgage companies were making loans that were abusive,"

I am sure there is some reform that can be done here but its not just the mortgage companies to blame. When my wife and I were looking for a home we were single earner family expecting a kid making about 90K. They were trying to tell me I needed a 250,000$ home! (In Minnesota). I ended up shopping around and found a fixer-uper for 115K (and I put another 20K into it during the purchase process). Long story short I had to be very strong with them about my disdain for ARM's frankly saving 2% on the interest rate is not worth the risk of getting stuck with something way bigger later should I not be able to move.

The consumer has a responsibility to be safe..

[RockinRight]

Sounds like there was stupidity all around - the borrower for knowing damn well her income was less than her payment, the broker for thinking he could do this forever (give her cash out to make the mortgage payments...)

[SaxxonWoods]

"As rates soar, 2.2 million Americans risk losing homes this year"

Risk is required in Capitalism.

Fortunes are made and lost, and made again.

Been there, done it, and prefer it to Socialism.

[P-Marlowe]

Each time she got into difficulties, her mortgage broker would offer a new deal. From an original loan of 103,000 dollars, she now owes the credit company some 285,000 dollars even though her monthly income has remained the same.

This must have been a variable interest, negative amortization loan with a balloon payment at the end of a specific term, i.e., three or five years.

IOW her payments on the $103,000 loan were probably something like $400 per month, but at the end of the term, she would be required to finance a new loan or sell her house to pay off the negative amortization. Now she can't do either. Even with a negative amortization loan, I can't see it jumping from $108,000 to $285,000 in a period shorter than about 10 years. She probably borrowed against the "equity" to purchase a second mortgage to pay the first or to blow on vacations and recreational vehicles. If she had a 10 year negative amortization loan, her negative amortization would have to be nearly $1500 per month for her to suddenly owe an additional $175,000 after 10 years. This simply does not make any sense at all.

[dakine]

In my e-mail:

"Why Refinance Now?
The window of low rates is closing, and the best opportunites will vanish soon.

» Dramatically lower your monthly payments! ...or...
» Take advantage of your home equity!

Imagine what you could do with that money...

* Pay off your bills and credit cards!
* Take that well-deserved family vacation!
* Send your children to the best schools and colleges!
* Make those home improvements you've been putting off!
* Just have fun with it... you only live once!"



See...'you only live once'....How could I go wrong....

[hophead]

What fool would allow themselves to take a loan on 110% of the value of their home? This is one reason why we read about the foreclosures today.