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Buried by mortgage

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  • Buried by mortgage

    I think we are going to see a lot more problems with home owners trying to make their mortgage payments.

    Have you seen more and more houses on the market?

    $1,300...$2,000...there goes your mortgage - Jemima and Ricardo Sanon, 30 and 29, saw the possibility of trouble before they ever signed their mortgage documents in 2004.

    The Sanons had diligently saved $5,000 in preparation to buy their first home, but the sum was just enough to cover the closing costs. So to finance the $290,000 purchase price of a Waltham, Mass home, they took one loan for $232,000 and also a piggyback loan for $58,000, both from New Century Financial, a subprime lender.

    The smaller of the two mortgages didn't worry them. The terms were fixed for 30 years at 10.7 percent, and the monthly payment of $538 was something they felt they could handle.

    But the larger loan was fixed for just two years. After that, the rate would adjust every six months, which is typical for subprime borrowers.

    For the Sanons, the initial monthly payment on the larger loan was some $1,300. Two years later, that payment jumped to over $1,800.
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  • #2
    That is why you always check to make sure that loan is fixed.

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    • #3
      Around here people are just up and leaving their homes letting the bank take it. Its crazy, the economy around here is terrible. And with all these big 3 buyouts they take that 80grand and buy some lawn equipment and make our market worse than it already is. Lawns that were 18 which was terrible are now 12.
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