Quote:
Originally Posted by oddball
Most of the walkaways or foreclosures have little or nothing to do do with increased mortgage interest rates in the great US of A .some of it has to do with greed and some to do with financial stupidity .With a mortgage readily available with(often)no down payment or no accountability in regard to the morgagee or thier true income , something had to happen , well it has and the banks are now crying "Mr government , please help us " Let iot be a lesson to all and sundry .
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er, that's what I was saying when I was referring to "increase in the adjustable rates of their ARM or because they used all the equity in the property to pay off credit cards or buy toys"...
I hat to burst your bubble but despite your arguments against, increased rates
have had an impact here; the fed fund rate may be heading downwards but mortgage rates are not directly based off that. What a lot of people are now finding is that with the fall in house prices caused by a depression in the market that their mortgages+HELOCs+HEL's cover more than the house is worth and the increased rates from the ARM's (whether they be 0% or higher introductory rates) leave them with not enough money to meet their monthly payments. This then leads to a foreclosure or short-sale and thus depressing local markets further and increasing the cycle. Many people brought property expecting to make a quick sale after a year and were shocked to discover the effect that the rates was going to have on their finances.
Granted there are folk who were just plain greedy idiots and deserve everything they get (except government help), and there are others who are simply stupid and didn't think about the long term consequence of their actions (or inactions) and never gave a thought to the possibility that they may loose everything.
When I was looking at buying a house in the UK years ago I wanted to know how much my payments would be at 15% figuring if I can't afford that figure then I can't afford th house. Over here I was able to get a fixed rate at 5.25% 15 years and at the time people thought I was crazy given the proliferation of 3% and 4% ARMs at the time.