Todays discussion relates to why there are so many foreclosures in today's market. You have seen the ads on adjustable-rate mortgages. You are drawn in by the advertised rate of interest...really low!.What the lenders are really handing you is an escalating rate mortgage.
Commonly called an ARM(adjustable rate mortgage)is indexed to the activities of one, three, and five-year Treasury securities. They do go down as well as up. They normally have by design and contractual agreement an automatic increase in them during the first part of the loan years. This is to compensate for the low introductory rate.Then,they revert back to the standard variable adjustments after a three-to four-year time frame.
The problem is, there are a few lenders that have been caught issuing loans with interest rates that only head in one direction...UP! What happens is, they are introduced at an extremely low rate. This entices the unwary victim, who thinks they are getting a bargain. A few years go by and the borrower finds themselves with a rate well in excess of the market.
Hence, the foreclosure process begins because the borrowers can no longer afford the payments. The problem now as you may have heard is, the government wants to stop the foreclosure process. This will alleviate the burden from the borrower. It does not help the hard working people that have paid off their loan in less than 30 years.
It seems that the people that got stuck with the high interest rates were mainly speculators looking to make a quick buck. They were really not interested in becoming a homeowner. The good guy homeowner receives a shrug and a feeling of frustration because they lived the American dream utilizing hard work as a tool to their long lived in residence.
Do you feel it is a good idea that the Government relieves these people of their debt? Isn't there enough Government intervention in our lives now? The responsibility of paying debt as always should be up to a borrower. Why are some held responsible and others are set free of their obligations? Let's keep this society a capitalistic, and democratic rather than socialistic and interfering.
What's your opinion on Todays Discussion?
1 comment:
Yea, I understand what you are saying. It's hard to keep people responsible when the Government steps in and gives away more of our tax dollars. A borrower does have the responsibility to know what they are signing. If they do not know how to read a loan document, than they should stay with an institution that they can trust.
The bottom line is; you are right on when you say that there is enough Government intervention in our lives now
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