Michele Malkin found a mortgage blogger [ Another F*ed Borrower,] who, with all due respect, is one of several million people who, because they pay attention, know how the liberal mind works and saw it coming from 10 miles away. Yup, there's a movement
afoot to make you assume the loan obligation for people who got in over
their heads with ARMs (Adjustable Rate Mortgages).
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I told you it was only a matter of time until the politicians started
talking BAILOUT for people that bit off more than they could chew. They
can’t have it both ways (or can they). They can’t have 70% ‘home
ownership’ (more like home mortgageship) on one hand, and then use
taxpayer money to say that nobody loses a house on the other. The thing
is, 70% of the population probably shouldn’t be owning a house, and
certainly not at the prices that many of them paid. The coming
‘foreclosure boom’ is going to realign the home ownership percentages
to more realistic levels and realign housing prices to levels that
reflect incomes…
…apparently, biting off more than one can chew is no
longer an individual problem, it is society’s problem. Who knew that
the ‘leaders’ of our country were so against personal responsibility.
Aside from the capital gains tax, ’society’ didn’t really benefit from
the massive property appreciation, so why should society have to foot
the bill for the ‘bad investments’ that were made.
Sadly, it isn’t just politicians on the national
level that are screaming BAILOUT! Seems that Los Angeles City
Councilman Richard A[l]arcon wants CITY, STATE, and FEDERAL funds to
bailout CITY homeowners that cannot afford their mortgages!!
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Build a city on land below
sea-level, and when it gets swamped go to the taxpayer. Build a
house on a a river flood plain, and when it gets flooded -
taxpayer. Deposit your savings in a bank paying 12% interest when
everyone else is paying 2%, and when it folds - you guessed it. I
have a good deal of empathy, but not sympathy, for home-owners who will
lose their homes, but hey, you took a chance. I toyed with a 2%
ARM several years ago, but opted for the safe 6% FRM.
Perhaps Inspector Hamilton put it best. "This stinking death cult compost heap needs to be destroyed and outlawed ball decent people."
I'm going to say a rosary and drink some Scotch.
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Part of the problem too is these 'interest-only' mortgages which allow greedy people to buy more home than they should. There is a nearby neighorhood with 600K-900K homes (a high price for our area) with 90% of them 'interest-only' homes. They would never sell that many without them- now those don't fit the low income 'poor' people profile you hear about but they are in it too.
ReplyDeleteTFV
I'm not familiar with these loans. Aren't interest payments front loaded? Normally, a new homeowner will pay for years before the principal begins to see any serious reduction. If so, where is the advantage?
ReplyDeleteNone of your monthly payment goes toward principle- only interest. If you look at a conventional mortgage amortization chart you will see that some portion is applied to principle even in the beginning, although you are right- more and more is applied as time goes on.
ReplyDeleteThis cuts the monthly payment to a level more affordable to the buyer- letting them buy more house than they should. They are gambling on real estate values rising to build their equity in their home. As soon as the market starting flattening or failing -- you guessed it. If they chose an adjustable rate and the payment rose-- trouble followed. They had a home where they couldn't afford the payments, whose value dropped, and they are in a negative equity situation - so they can't even sell and buy something less.
TFV
Now I just need to find my way into that utopian scheme where I gamble with other peoples' money, take all the gains but don't suffer any of the losses created by poor judgement.
ReplyDeleteInterest only loans and and buying mulitple houses with ARMS- like investing in tulips.
ReplyDeleteRAK
Anon 12:02-- you want to be a mortgage lender who offers ARMs. When your little scheme goes bust, get a gov't bailout.
ReplyDeleteYou didn't actually think this plan was about helping homeowners, did you? Nobody talked about helping the homeowners getting squeezed by rate increases-- until the foreclosures started.
For those that are following this mess, here's my fav site, the mortgage lenders implode-o-meter: ml-implode.com
ReplyDelete