Storrmmee wrote:
<snip>

>> That was the idea that tones of peole had and that was encouraged by
>> banks, realtos, etc who then sold houses with trick mortgages tht
>> went way up in interest rates afeter a few years. The assumptin was
>> that the house woul dbe worth so much more that the people who would
>> be unable to pay the high interest rates would be able to sell out
>> at the higher price and do the same thing al oer again.
>>
>> You may not have had the adjustable mortgage, but your husband had
>> the idea that many many people had and that ultimately led to the
>> finanial and housing crash that has led to the terrible current economy.
>> Your husband was far from alone. Many Americans kept
>> taking out money fromtheir houses by refinancing or takign out
>> second mortgages that when the housing prices fell, they were left
>> underwater(house worth less than mortgage). Wendy

All this is true, but just as an aside, I just want to point out that there
is nothing wrong with adjustable mortgages per se. We've had them for
decades, and always made out better than people with fixed. But an
adjustable mortgage ought to have both annual and lifetime limits on how
much it can adjust, and you ought to pay attention to the actual reset terms
(X percentage over Y rate), not just pick one with the lowest teaser rate
that enables you to qualify for the biggest mortgage. The people who went
wrong generally went for things like balloon mortgages, which have been
notoriously risky for decades, and other excessively risky constructs with
unrealistically low teaser rates followed by huge adjustments.

Not to mention the whole issue of loans being written with no income
verification...