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Originally Posted by irishgrl
well, the reason the foreclosures are up is because buyers were being offered deceptive financing and they figured they'd be making increasingly more wages to offset the anticipated increase in interest from the ARM.
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Actually, it's more like the staggering amount of credit card debt in this country
Again, a $50 to $100 increase in a morgage likely will not cause a foreclosure unless other serious problems are there.
Now - are banks loaning money to non-qualified people? Of course they are. But, many of those people are minorities or people who qualify for some program that mandates they be given the money. I am unsure however what percentage that entails. The mtg. lending rules are, however, pretty strict regarding qualification, though they can be played with by a smart buyer.
Quote:
Originally Posted by irishgrl
Sadly, jobs are going away or being outsourced or eliminated due to budget cuts, and people are left holding the bag. People in the Bay Area who USED TO make good $$$ either have only one income left to do the work of two or in some cases, no income at all. Its just not realistic. I HATE HATE HATE ARM's. I dont believe in gambling with your HOME. you need to know up front whether or not you can afford something, and if you cant, then WAIT!!
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In that job loss case, it would make no difference what kind of mortgage you had and, quite frankly, the ARM would be better for you if your income dropped because the monthly payment under that ARM likely would not reach the usually much higher fixed rate payment for 7 or so years