What a scam these home loans have become in the past couple of years or so. It's just amazing that the loans were offered when those mortgage brokers knew the people they were selling the mortgages too would have no way to afford the loan after the initial teaser interest rate period was over.
It's too bad so much damage has been done by this but I am glad to see more stricter rules in place to keep this from happening again, I hope!
What's your view on all this?
Fed to tighten up lending rules - The Federal Reserve on Tuesday will propose a much stricter set of rules for mortgage lenders as part of the central bank's effort to avert abusive lending.
1. Prohibit giving people unaffordable loans. One reason for the spike in foreclosures among those with subprime adjustable-rate mortgages (ARMs) was that lenders measured borrowers' ability to repay the loan based on the low introductory loan rate, but not on the higher rate that the loan would reset to. The Fed may propose that lenders base affordability on a borrowers' ability to repay a loan at the reset rate.
Interisting but on the other hand you as a home owner can buy and sell your own mortage so I always hate to see people losing something they worked so hard for. But they had to know it would at some point float so before that time came they should have started looking for a new mortage. It all falls down to being resposable home owner and whating your investments this includes most of all your home.
I may sound shrude about it but it is a hard knock. Maybe theres more to the details of all the foreclosures than I know but this is just how I looked at it.
I think one of the problems I have seen is that many people do not read what they are signing before they sign it.
I have seen people repeat the same mistake over and over again when it came to car loans. Then when a broker tells them they can afford a house that is too much for them, they sign on the dotted line without caring too much about the reseting of their loan fees!
I am not a big fan of government regulation because they tend to go overboard but there is a need, I feel, to help protect consumers. Otherwise, a lot of smart people out there will word contracts and sell products which will take advantage of others. That's never a good thing.
Have you noticed a big change in the real estate business in your area?