How Millions of American Will Lose Their Homes (Option ARMs)

[nebula]

Run time: 01:49 https://www.youtube.com/watch?v=biP2JOf5euo   Posted on YouTube: August 13, 2007 By YouTube Member: Views on YouTube: 0   Posted on DU: January 17, 2008 By DU Member: nebula Views on DU: 469

 
The Sub Prime mortgage crisis has hit and the effects are still unknown. But the Option ARM crisis has not hit yet (or has it). The Option ARM is not a Sub Prime loan!! People with good credit scores and low income have this too. Reckless home purchases and refinances with no long-term goal.

**Please note - $2661 was assumed to be interest-only payment for this video at 00:15 seconds...so, it should of been 8% fully indexed rate instead of 7%. Doesn't change much, just that one slide...I caught it too late.

[CoffeeCat]

1. You make a good point...

Sub-prime loans and adjustable ARM loans are two entirely different animals.

I assume that the current housing crash is a product of BOTH sub-prime AND
ARMS.

I don't think the media makes the distinction. What they can't explain in a
7-second soundbyte is never laid out.

[TexasBushwhacker]

2. I have a theory on this

It's kind of like after Hurrican Katrina, when they'd show white people wading through the water with bags of groceries on their heads they were "saving what they could". When they'd show black people doing the same thing, they'd call it "looting". I think they're focusing on the sub-prime mortgage "crisis" because most people will think that the people that got the loans are poor, have poor credit and not white. The only way this is really a "crisis" is how it effects the banks and mortgage companies that will be left holding the bag, the mortgage insurance companies that will have to cover their asses, and the shareholders of those companies. I don't think the MSM gives a shit if homeowners who have sub-prime mortgages lose their homes, because they think their all losers.

They thing is, if the "sub-prime" crisis that they speak of includes interest only and option ARM's, we're going to see massive numbers of foreclosures in states like California where real estate is so high, and the people losing their homes won't necessarily be the traditonal down-and-outers. There are also plenty of elderly people and others who've taken out loans against their equity that are going to be hit hard as well.

There is a trickle down crisis as well when there are lots of foreclosures. Subdivisions get abandoned by builders, and even people who've bought new homes that they can afford, suddenly find out that their home is worth 20-30-40% less than what they paid for it. If they get transferred or for whatever reason need to sell their home, they either owe money at closing or they have to walk away from it and let it ruin their credit.