Bush's bailing out of the irresponsible Options

[Hartmann]

http://seattletimes.nwsource.com/html/busi...mortgage06.html

Of course this still has to go through Congress where it will get a bunch of crap amended to it and blah, blah, blah.

It is not the government's job to intervene on the free market. If people are irresponsible then there is no reason to change the market to cater to them, hurting others who were prepared.

[DaveFireDancer19]

impala, its like you're trying to put all the blame on lenders.

ARM mortgages ARE set to an index, lenders cannot just "turn up the dial". ARMs reset according to their terms (sometimes means two years fixed, then a large increase in interest rate or even when the principal has gotten to $X amount from negative amortization from paying so called "minimum payments", then ARM resets). Some Lenders gave ARMs to people who would not qualify for a fixed rate loan and showed the customer a lower payment, and made them think "oh I can afford this" but never explained that it would readjust or that no principal is being paid down thus not building equity thus making it damn near impossible to refi into a fixed rate before the ARM resets.

However, if the customer is stupid enough not to do their homework and realize that teaser rates expire, principal does not reduce with a payment that doesn't even pay interest, and housing prices could decrease (despite the market at the time), then they don't deserve to have a home to begin with...If they would have read the fine print and realized that if their ARM fully adjusted they wouldn't be able to make payments or if they realized that their minimum payment was resulting in negative amortization...then they wouldn't have done it to begin with, hopefully at least....bottom line, the customer is a dumbass for signing something he/she did not FULLY understand

What do you base your information on? Being a home buyer does not make you the end-all be-all for all things mortgage (or credit cards for that matter, remember that thread, you're wrong)

I work in the banking industry (on the other side of the fence at least)...I look at mortgages/loans all the time. Terms are spelled out...very clearly in fact...and then there are all the disclosures the customer gets, Im sure you remember signing all that paper work. ARMs have their own set of disclosures, including one that says "you are applying for (or getting or whatever) an Adjustable Rate Mortgage" then tries to explain what it is...most people, stupidly, just don't read all that paper work, did you?

Bottom line, if the buyer is ignorant enough not to read the fine print (or their mortgage contract where everything is spelled out), then they deserve whatever is coming...Its surprising that you actually admit you weren't able to find your mortgage terms (or whatever you said, something to that effect), when in fact they are very clearly printed. You shouldn't have signed something you didn't understand. Hopefully you're lucky and didn't sign something you won't be able to pay for eventually

Im thankful that lenders who provided no-doc mortgages or 100% financing are getting theirs, but I think the government should back off and let the consumer reap what they sowed (or is it sew?)

If you want to bitch and moan about something, but about the high concentrations of CRE (commercial real estate) loans in our banks portfolios...

(sorry that was a little jumbled, I get annoyed when people think they know what they are talking about simply because they happen to have a mortgage. I probably left some important things out, like stupid people who think no-doc loans are absolutely fabulous because they won't have to supply income information and maybe squeak by with being qualified for a loan by lieing about their income...oh well)

[pebkac]

impala, its like you're trying to put all the blame on lenders.

ARM mortgages ARE set to an index, lenders cannot just "turn up the dial". ARMs reset according to their terms (sometimes means two years fixed, then a large increase in interest rate or even when the principal has gotten to $X amount from negative amortization from paying so called "minimum payments", then ARM resets). Some Lenders gave ARMs to people who would not qualify for a fixed rate loan and showed the customer a lower payment, and made them think "oh I can afford this" but never explained that it would readjust or that no principal is being paid down thus not building equity thus making it damn near impossible to refi into a fixed rate before the ARM resets.

However, if the customer is stupid enough not to do their homework and realize that teaser rates expire, principal does not reduce with a payment that doesn't even pay interest, and housing prices could decrease (despite the market at the time), then they don't deserve to have a home to begin with...If they would have read the fine print and realized that if their ARM fully adjusted they wouldn't be able to make payments or if they realized that their minimum payment was resulting in negative amortization...then they wouldn't have done it to begin with, hopefully at least....bottom line, the customer is a dumbass for signing something he/she did not FULLY understand

What do you base your information on? Being a home buyer does not make you the end-all be-all for all things mortgage (or credit cards for that matter, remember that thread, you're wrong)

I work in the banking industry (on the other side of the fence at least)...I look at mortgages/loans all the time. Terms are spelled out...very clearly in fact...and then there are all the disclosures the customer gets, Im sure you remember signing all that paper work. ARMs have their own set of disclosures, including one that says "you are applying for (or getting or whatever) an Adjustable Rate Mortgage" then tries to explain what it is...most people, stupidly, just don't read all that paper work, did you?

Bottom line, if the buyer is ignorant enough not to read the fine print (or their mortgage contract where everything is spelled out), then they deserve whatever is coming...Its surprising that you actually admit you weren't able to find your mortgage terms (or whatever you said, something to that effect), when in fact they are very clearly printed. You shouldn't have signed something you didn't understand. Hopefully you're lucky and didn't sign something you won't be able to pay for eventually

Im thankful that lenders who provided no-doc mortgages or 100% financing are getting theirs, but I think the government should back off and let the consumer reap what they sowed (or is it sew?)

If you want to bitch and moan about something, but about the high concentrations of CRE (commercial real estate) loans in our banks portfolios...

(sorry that was a little jumbled, I get annoyed when people think they know what they are talking about simply because they happen to have a mortgage. I probably left some important things out, like stupid people who think no-doc loans are absolutely fabulous because they won't have to supply income information and maybe squeak by with being qualified for a loan by lieing about their income...oh well)

What do you get when you give a person who already has poor credit and a low income a loan that will jump to astronomical interest rates? Banks should have known better than to make most of these loans.

[DaveFireDancer19]

What do you get when you give a person who already has poor credit and a low income a loan that will jump to astronomical interest rates? Banks should have known better than to make most of these loans.

People should have known better to sign loans like these...they just didnt feel like doing their homework! its not hard....

btw impala if a person cant figure out how much they can afford, they should continue renting or living with their mother....also, how is..say LIBOR controlled by the lender? or WSJ prime? I know what your saying about some bank's having their "own" prime, but those are usually set to something as well and aren't changed on a whim....