|
|
Post by Hulkamaniac on Jan 14, 2008 11:01:52 GMT -5
I realize that a lot of the users here probably don't care about this, but it kind of ticks me off. I saw an article a day or so ago in the local paper about a lady who was going to lose her house after her adjustable rate mortgage jumped from 8.25% (where she's just getting bent over) to 11.25%(where she's getting bent over and they have a broomstick). Now I'm listening to some nutcase on the radio going off about how the "credit and housing slump" is going to kill our economy.
I'm sorry, but I just don't see it. There is a slump in the subprime mortgage market, but that seems to be about it. I go to Wal-mart and the lot is still packed. I don't know of anyone I work with who doesn't know how they're going to pay their bills.
Yes, there are idiots who get themselves into stupid sub-prime adjustable rate mortgages and get burned but that's about it. And I can't seem to really feel sorry for them. I think it's a little ridiculous that both the Democrats and the Republicans are talking about bailing out these idiots instead of just letting the market spank them and correct the problem. Am I just being a cruel bastard again?
|
|
|
|
Post by T R W on Jan 14, 2008 11:49:44 GMT -5
I rememebr when I bought my house...and they offered me an ARM loan. I was like...ok..I can get an arm for 5.5....or...I can lock in at 6%....
Yeah...I'll take the 6%...thanks.....
ARM loans let people buy houses they can't afford anyway, which is why so many people are hosed. It's stupid on the customer's part, and the loan companies are definitely guilty of being shady. Personally, I like to see both ends get slapped down.
|
|
|
|
Post by Hulkamaniac on Jan 14, 2008 12:10:03 GMT -5
The article with the chick who had the ARM had a great quote. The chick said, "It's not like I bought something I couldn't afford." Um, yes you did. When the payment jumped from $600 to $2200 you couldn't afford it.
|
|
|
|
Post by addam on Jan 14, 2008 13:12:22 GMT -5
The article with the chick who had the ARM had a great quote. The chick said, "It's not like I bought something I couldn't afford." Um, yes you did. When the payment jumped from $600 to $2200 you couldn't afford it. well, it's actually a lot more in depth of a problem than that. yes, people did get ARM loans & the payments jumped so that they can't afford them now, but most ARM loans were done to get people into houses that didn't qualify for loans at a regular bank or couldn't get loans thru fannie mae or freddie mac programs at affordable prices. since the rate is less on loans that are refinanced as opposed to purchases ARMs were a good way to get people affordable payments until they were able to refinance the house at a better rate after a year of 2 had passed. what happened with the housing slump is that property values plummeted & people are stuck with houses that won't appraise for even what the people paid for them, so they are stuck with a loan with an ever-rising payment, no way to get out of it & no equity in their home due to declining market values. the housing slump & amount of foreclosures forced the entire market to change so the ARM loans that weren't problems to refinance before became a major problem for everyone with them practically overnight. so the customers didn't take loans they couldn't afford theoretically, the entire lending market changed so that they became unaffordable to the customers. |
|
|
|
Post by Hulkamaniac on Jan 14, 2008 14:17:29 GMT -5
The article with the chick who had the ARM had a great quote. The chick said, "It's not like I bought something I couldn't afford." Um, yes you did. When the payment jumped from $600 to $2200 you couldn't afford it. well, it's actually a lot more in depth of a problem than that. yes, people did get ARM loans & the payments jumped so that they can't afford them now, but most ARM loans were done to get people into houses that didn't qualify for loans at a regular bank or couldn't get loans thru fannie mae or freddie mac programs at affordable prices. since the rate is less on loans that are refinanced as opposed to purchases ARMs were a good way to get people affordable payments until they were able to refinance the house at a better rate after a year of 2 had passed. what happened with the housing slump is that property values plummeted & people are stuck with houses that won't appraise for even what the people paid for them, so they are stuck with a loan with an ever-rising payment, no way to get out of it & no equity in their home due to declining market values. the housing slump & amount of foreclosures forced the entire market to change so the ARM loans that weren't problems to refinance before became a major problem for everyone with them practically overnight. so the customers didn't take loans they couldn't afford theoretically, the entire lending market changed so that they became unaffordable to the customers. The problem isn't that they can't re-fi. The problem is that these people bought houses that they had no business buying in the first place. |
|
|
|
Post by addam on Jan 14, 2008 14:28:25 GMT -5
well, it's actually a lot more in depth of a problem than that. yes, people did get ARM loans & the payments jumped so that they can't afford them now, but most ARM loans were done to get people into houses that didn't qualify for loans at a regular bank or couldn't get loans thru fannie mae or freddie mac programs at affordable prices. since the rate is less on loans that are refinanced as opposed to purchases ARMs were a good way to get people affordable payments until they were able to refinance the house at a better rate after a year of 2 had passed. what happened with the housing slump is that property values plummeted & people are stuck with houses that won't appraise for even what the people paid for them, so they are stuck with a loan with an ever-rising payment, no way to get out of it & no equity in their home due to declining market values. the housing slump & amount of foreclosures forced the entire market to change so the ARM loans that weren't problems to refinance before became a major problem for everyone with them practically overnight. so the customers didn't take loans they couldn't afford theoretically, the entire lending market changed so that they became unaffordable to the customers. The problem isn't that they can't re-fi. The problem is that these people bought houses that they had no business buying in the first place. well, yes & no. they could afford the homes at the lower rates, just not the higher rates they have to pay now since the amount of foreclosure have forced lending guidelines to tighten & the properties are worth less. so, if they were able to refinance the homes at the rates they were paying before they went up, then yes they could afford them, but since they can't do that they can't afford them because their rates keep going up. |
|
