"The Pooring of America": Foreclosures May Jump As ARMs Reset

[Yollam]

http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2006/06/19/financial/f101242D66.DTL

Foreclosures May Jump As ARMs Reset
By J.W. ELPHINSTONE, AP Business Writer
Monday, June 19, 2006

In 2003, Anita Britten refinanced her two-story brick cottage in Lithonia, Ga. using a hybrid adjustable rate mortgage, or ARM. Her lender reassured her that she could refinance out of the riskier loan into a traditional one when her interest rate started to reset.

Three years later, Britten can't get a new mortgage and her monthly payment has jumped by a third in six months. She can't afford her payments and may face foreclosure if her financial situation doesn't change.

As more ARMs adjust upward and housing prices begin to dip, many Americans like Britten can't refinance and are finding themselves trapped in too-high monthly payments. For those who can't make their payments, foreclosure — the legal process by which the lender reposseses the house because the owner has defaulted on payments — is the only way out.

Foreclosure figures just released by the Mortgage Bankers Association show that foreclosure activity fell in the first quarter of 2006 over the first quarter of 2005 for all loan categories except subprime loans. The MBA didn't specify how many of subprime loans were adjustable rate mortgages.


Okay, I'm going to try using the "Pooring of America" tagline on all the posts I do in this vein for a while and see if it catches on. Seems apt to me.

[Patchuli]

1. Thank goodness

we got out of ours and back into a more traditional loan!

[Yollam]

3. You know what all those foreclosures mean...

...more dirt-cheap buying/investment opportunities for the rich, bank accounts flush with bucks from their tax cuts and swollen defense industry portfolios...

[Patchuli]

13. That is why as bad as it's getting,

it may be time to

EAT THE RICH! They want a classwar? We should oblige them!!! We way outnumber them, that's for sure!

[MadMaddie]

2. We all saw it coming....didn't we? I feel bad for those that

can't get out of those loans now.....it's going to start getting rough for a lot of Americans....

[liberaltrucker]

4. You live by capitalism, you die by it

Sorry if I seem cruel, but John D Rocky said in 1930,
"Gentlemen, I have no money".

Those who fell for the "easy money" refi's who didn't
check into the possible pitfalls got what they deserved.

I'm as liberal as they come, maybe bordering on, dare I say
it, Marxist. BUT, I understand the capitalist system well enough
to avoid it's "easy money" traps, and to realize that there are
fucking wolves out there ready to take advantage of the ignorant.

[Yollam]

5. That's fine and dandy...

...but you get enough people who were suckered into the easy money in default and foreclosure a few years later, and you start to have an economic catastrophe that starts to hurt even those of us who lived within our means, not to mention our property values...

[liberaltrucker]

7. True enough...

I never implied the innocent wouldn't be hurt.
It's the system that allows this to happen that's
broken. Same as in '29.

Difference is, FDR came along to save capitalism
from itself. Who will be our version of FDR?

:scared:

[MadMaddie]

6. I have to agree with you....and it certainly doesn't help

when you have an administration that allows deception and outright lying by big business.......

[liberaltrucker]

10. There's still time IF our fellow citizens wake up

Take action in '06 and '08. If we don't prevail, THEN,
I'll, uh, consider other "options".

[ConsAreLiars]

8. People have been conned into trusting "the system"

and believing the lie. You and I may be smart and/or lucky, enough to know the enemy and evade the traps. Many are not. Not their fault.

[IndyJones]

9. People are not going to die...just lose their homes.

Yes, it's ignorant to get into something you won't be able to afford, but the reality of the mess still will exist. We're just commenting on the upcoming reality of the foreclosures coming down the pipeline.

[liberaltrucker]

11. Agreed...

Got carried away in one of my "moods".

:blush:

Carry on.

[Yollam]

12. 60% of home loans in SF Bay area are high-risk.

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2006/02/19/MNG8THBH4T1.DTL

Last year, about half of Bay Area home buyers took out interest-only loans, according to San Francisco's LoanPerformance.com. These loans require no principal payments during an initial period. At the end of the period, however, monthly payments jump as principal payments start coming due. With interest rates expected to rise gradually through the year, payments could soar even higher, putting some borrowers into precarious financial positions.

Affordability

The high use of interest-only loans illustrates the eroding ability of many consumers to buy ever-pricier homes, which some experts liken to a balloon that eventually hits the ceiling.

While the average pre-tax household income in San Francisco between 2000 and 2004 grew about 16 percent, from $64,818 to $75,390, home prices rocketed nearly 43 percent -- and probably more in some desirable areas.

According to the California Association of Realtors, only 12 percent of Bay Area households can afford the median-priced home.


In other words, the absurd home prices in the Bay Area, and elsewhere are totally artificial, and being propped up by high-risk loans by people who CANNOT AFFORD the homes they are in.

This is what my repuke step-dad calls "the wisdom of the free market". :crazy:

[datasuspect]

14. THEY live by capitalism, WE die by it.

how much is milk now?

uggh