Who's to blame for the Mortgage meltdown?
- Thread starter Cypress
- Start date
Some have noticed!
LOL!
There is nothing that they have done to help the person that borrowed the money? They are only helping by printing more money, or are going to help the banks in all their talking on it, their big campaign contributors....
it's all bull shit tiana...
and I don't think they should bail them out either.....
as far as these being all traditional type mortgages including the NORMAL ARM and Balloon type loans...THAT is not true from what I have heard and read about it.... they used the tradidional ARM only in a non traditional manner... they started them with NO INTEREST, for a year or a month and crap like that....stuff that has NEVER been done before in our history is what caused this crisis, which has made many of these people ADD to their original loan, making their homes worth MORE than they were when they first financed the homes...and now trying to refinance they can't get a loan worth more than their homes are worth.
Matt and I uses a Ballooning 7 year arm, where the interest would stay low when we refinanced the house in massachusetts, knowing we were going to sell it within the next 3 years...it was only 1% lower than the going rate for the conventional 30 year.... this IS NOT the kind of loans that have gotten this country in to so much trouble and much worse trouble to come next year.
Care
Last edited:
Cancel 2016.2
The Almighty
Care,
The traditional ARMs typically had a fixed rate for the first two to three years and then began the resets. Which is why the loans issued in 2005 and 2006 are hitting this year and next and screwing people up. It is most certainly what is happening right now (see example I gave above). One of the main reasons that many people are not able to refi right now is because they bought more home than they could afford, at the peak of the real estate market and now their homes have declined in value combined with rates going up means that most have lost equity or even gone to negative equity positions and they thus do not qualify to refi.
The media has certainly focused on the unique cases, those with big baloon payments that the borrowers were not ready for etc.... but the bulk of the problems is simply ARMs resetting sending mortgage payments up 30-50% depending on what your initial rate was. How many people do you know that could afford that kind of payment hike?
Epicurus
Reasonable
super,
how were they sub prime loans if they were just the traditional arms that have been there for decades?
and the prices did not fall for housing until these people started to default, flooding the market with homes..so that the first group of people should have only been faced with is having to refinance what their homes were worth, NOT MORE than what their homes were worth, no? But they were defaulting anyway, not qualifying for a conventional mortgage, or a traditional arm even....
i think this is because of the fiat loans they were given, that put them in a ''negative'' equity position with their homes before the home market started to fall....
in the last 5 years at least and maybe even 7 years, mortgage rates for the conventional 30 year hasn't fluctuated more than 1%...btween 5.5% to 6.5% which is still extremely low compared to my first home bought in 1980/81 that had an interest rate of 13.5%....
only after this first group of people that were defaulting on their loans did the market start to fall and i find it hard to believe that this happened with a normal, 3, 5, 7 or 1o year ARM where the beginning interest rate was only about 1% lower than the conventional 30 year fixed....that put them in a position of negative equity, and having to default verses refinance.
care