Posted on 09/05/2006 2:01:48 PM PDT by ex-Texan
With millions of adjustable-rate mortgages about to reset this fall, experts expect a wave of foreclosures by Americans in every income bracket. Here's why they could soar in late 2006 and beyond:
Those easy-mortgage chickens are coming home to roost.
This fall the adjustable-rate mortgages (ARMs) that millions of Americans took out during the recent housing boom will be reset, and many homeowners will see their monthly mortgage payments shoot up by as much as 20%. According to the Mortgage Bankers Association, of all mortgages financed in 2005, 36% were ARMs -- the highest ever.
This is a matter of concern because ARMs are typically initially made at a lower rate and then increase after a fixed period of time, usually one, three, five, seven or 10 years, after which the rate will more closely reflect current rates. As interest rates increase, mortgage payments increase. Between $400 billion and $500 billion in ARMs are due to be reset by the end of 2006. The following year will be even more dramatic, when more than $1.5 trillion will be reset.
For many Americans, this is scary news, if hardly unexpected. * * * [M]any of them are finding themselves stuck in a house they may soon no longer be able to afford, and, as the real estate market peters out, there's little they can do about it. * * *
Unprecedented situation:
* * * A major concern is that the number of ARMs issued at subprime rates to borrowers with lower credit ratings is not known. "We know that ARMs default at a higher rate than fixed, and subprimes default at higher rates than primes," says Sharga. "Never have so many ARMs reset at the same time. There is no precedent for it."
(Excerpt) Read more at realestate.msn.com ...
You just defined the psychology of deflation. It hit Japan and lasted ten years. It is entirely possible that the housing market could go into a prolonged deflationary slump, as potential buyers watch and wait for the bottom. Meanwhile, the improvident ( I notice all freepers without exception are real estate geniuses who guessed exactly right every time) will one after another leave the door keys in the mailbox and move back to Buffalo.
Mine too..........It aint luck.
I keep hearing that if California was a separate country it would be the world's 7th largest economy.
--Anyone that elected an ARM vs. fixed over the past 12 years has come out way ahead.
I guess my mortgage company must be a real swell bunch of fellows because they have been trying to get me to switch to an ARM for the last four years or so. They have my best interests in mind I'm sure.
Only if Santa's leaving coal! Have you been naughty? >:-)
Because otherwise, Santa leaves gifts you generally like or want! ;-) (But I get it, it's about the traveling...)
I'm still looking for the pony, he's around here somewhere
ping...
Months? Try YEARS!
He has been posting that link to his site for years. If he has been doing it with no problem from the admins for years, I don't see it being a problem now.
Finally something that makes sense
The first thing they are going to do is close the deficit by retracting all the tax breaks.
And that would require Bush's signature. Not going to happen.
And thats about the only prediction I am willing to make regarding Bush's actions. That he won't raise taxes. Other than that, I think he is capable of almost any crazy scheme.
Must be next to my puppy, already named, and my dollhouse. ;-)
LOL!
Are you some kind of moron? Why the hell would you do a stupid thing like that?
40 year mortgages are where its at!
And as soon as they come out with a 50, which is just over the horizon, refinance to that!
You wouldnt like my 15 year loan?
He who talks first loses.
I've been in every state and several places in most of them and there isn't one place in the country that I would even consider living if the house was free.
I'm staying right in So. Cslif. where my fsmily has been for over 150 years.
Feel free to pay a $400,000 premium for that right. It's your freedom and right to do so! It just doesn't make sense to me or many others.
No!
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