Posted on 08/31/2006 5:26:52 PM PDT by Mini-14
Was that A Farewell To ARMs ???
This assumes the real estate company is ethical and honest.
I would say most are but there are those few that are in it to make a fast buck.
The local paper had an article about people buying more house than they should. One misstep, injury or out of work for a short time and they lose the house. The paper pointed out one house which had been sold 3 times within the last 5 years and each owner defaulted.
I'll see if I can get the link.
Look at the posts that people are making. Articles like this are an opportunity for people to feel intellectually and morally superior to others.
True.And want everything today.
I didn't even hear of ARMS until the 1980's and they were still rare at that time.
Debt is debt. Credit card, mortgage... all the same. It's all a question of the interest rate you pay on the money. And whether or not that interest is tax deductible.
With a little math, it's easy to figure out what is the best scenario for one's financial condition. Now if folks just knew how to use a calculator...
Technically, no business has a conscience. But that isn't what the poster meant.
Regarding what the poster meant, who cares!
Do you think "the car game" has a conscience? Or would the local dealer stick you in a $800 a month payment after rolling $6,000 of negative equity into the loan and not think twice about it? Of course he would do it.
How about the credit card companies charging 22% that gave you the problems in the first place? Do they have a conscience?
No business has a conscience and no industry has a conscience. They all want to "move product" and do it as fast and in as much volume as they can. Period.
If you are a moron and take a bad loan then you are to blame. Not a TV commerical, or the "mortgage game". YOU are to blame.
**GROAN**
What was interesting is the allegation that the deferred interest carried on balance sheets of lenders is "phantom profits." In fact, the deferred interest can be recaptured by adding it to the principal balance of the mortgage. However, they almost have a point. To the extent people DO NOT have sufficient equity in their homes, the profits will not be realized.
Another claim that investors and lenders have nothing to lose is simply hogwash and anti-capitalist propaganda. Lenders who hold the mortgages in their portfolio can lose, as can investors who buy tranches that contain the riskier loans. Lenders who sold this product to unsophisticated buyers, however, should be horsewhipped and they will reap the whirlwind when the bill comes due.
There is a good story here, but it has been overwhelmed by the bias and ignorance of the people who wrote it.
Some people have to live in the moment.
Exactly. No sympathy from me. If you don't know the rules, stay out of the game.
I won't roll through my entire story, but if when I purchase my home in 1999 I had gone with a fixed rate mortgage I would have payed far more each month for the next 6 years in many many many thousands of dollars. I bought it with a 1 year ARM. It dropped every year. I refinanced in 2003 at what was arguably "the bottom" (3/1 ARM at 3%!!!) because I knew I would be out of that home and in a new one in less than 3 years. And I was. Am in a new home now. Bought with a fixed.
Different times, situations, scenarios, and plans call for different loan terms.
But an ARM was the best option for me and I save THOUSANDS of dollars by doing it.
I'm in a 5 year ARM now, and have been for 3.5 years. I'll be moving within the next three months, and knew when I bought the home that it was my timeline. Instead of financing at 6.125%, I have a rate of 5.675%. I saved quite a few dollars as a result.
The key is to understand your plans and the terms of the mortgage, and finance accordingly.
I know you & RIR are ethical dudes. I also know it's not the fault of 'the mortgage game" when people make bad decisions.
Maybe the public schools, that all you SMART guys, let educate our children, had a little something to do with it.
Next thing you know, some democrat congressman will be
calling for a "Short ARM" investigation.
** Double GROAN!
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