How many of you people in here could afford to have your mortgage jacked up from say $1000 a mo. to $3000/mo. or face foreclosure? I thought a lot of people got caught up in the ARM's not that they bought a house they couldn't afford. Maybe they got their first opportunity with not the greatest credit to be a first time homeowner. I may have fallen victim if I had a little extra money at the time.
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Depends, the resets are all over the place, some have floors, some just reset at Index + spread. If the spread is higher than the previous spread, or the index has gone up since the initial loan was made, the rate and payment will go up. Some also start amortizing which will undoubtedly increase the monthly payment.
Now, I am of the opinion that if you can't afford an amortizing payment or if your margin between keeping a house and losing a house is so slim that you can't afford the reset, you can't afford the house and shouldn't have ever had it. If you are simply paying interest only, you are renting, not purchasing, a house. You will never own it paying interest only.
Dropping property values and no money down or low money down loans are the greater cause. Purchases were made with the expectation that values would continue to rise (or at the least not drop) and when the reset came, they would refi to another interest only or neg-am and continue paying IO. When values dropped, they couldn't refinance and in turn couldn't afford the reset/amortizing payment and ended up in foreclosure.
Everyone is culpable, banks, mortgage brokers, and borrowers. But at the end of the day, borrowers borrowed the money and knew whether or not they could afford a mortgage. No one forced their pen to paper.
Do they make you play?
Fucking losers should never be able to buy a house again. It'd be nice if the banks could bankrupt all of them if there is evidence that this kind of activity took place. Problem is that most of these losers have probably already filed bankruptcy. In my opinion, bankruptcies should NEVER be cleared from a person's credit. I've had two neighbors who filed bankruptcy and then bought their house within a year or two afterwards. Surprise, surprise, they were both foreclosed on.
I'm not just railing on the homeowners here either. I'm actually more pissed at the scumbag mortgage companies, mortgage "brokers", realtors and builders who got fat off this mess. They're all scurrying away like roaches now, and guess who's going to have to foot the bill for all the bailouts? That's right, you and me Joe Sixpack Taxpayers.
I'm not just railing on the homeowners here either. I'm actually more pissed at the scumbag mortgage companies, mortgage "brokers", realtors and builders who got fat off this mess. They're all scurrying away like roaches now, and guess who's going to have to foot the bill for all the bailouts? That's right, you and me Joe Sixpack Taxpayers.
