3 replies to this topic

[nimblebear]

Missed in this recent yield jump is the fact that 2 million ARMS are due to reset yet. It will be interesting how many foreclosures occur as these people get whacked.

[mcleert]

could be right--------but some people like myself ---refinanced using a 10 yr arm on a loan in 2000 due to reset in 2010. The purpose was to get a loan with lower interest and---not to add to the loan for the purpose of paying off credit card debt or to borrow for something not needed. My point------some arm loans are good if you use them correctly. For sure----interest rates may continue to rise and I may have to refinance or pay off the loan before 2010 reset date but that was an option I considered in 2000. I think we have more intelligent people refinancing loans than we realize and statistics using doom and gloom scenarios don't take that into consideration.

Edited by mcleert, 08 June 2007 - 11:50 PM.

[Rogerdodger]

I think we have more intelligent people refinancing loans than we realize and statistics using doom and gloom scenarios don't take that into consideration.

I agree that a lot of folks have benefited from the low rates and have made wise decisions.
I refinanced some rental property at a lower rate and used the equity to pay off our home.
Then I doubled up the payments on the new 5 year ARM and now it will be paid off before the adjustment.

However, there are always stupid people who choose to ignore reality.
The problem is that THEY were allowed to buy homes which they could not afford in a good economy with low rates. Many did not even make the first payment!
If the economy softens or rates rise, watch out.
55 homes were foreclosed on here in Tulsa County just last week.
(70+ were foreclosed on the first week of the year)
Additionally, the county treasurers office has a different list of properties being sold at auction for deliquent taxes.

I don't think that's necessarily "Gloom and Doom" but one could expect that when a record number of people have mortgages, and record a number of them were really unqualified buyers, we can expect record foreclosures down the line.
Especially with rising rates.
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Edited by Rogerdodger, 09 June 2007 - 12:31 AM.

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Fools and their money are soon parted. It just takes a little longer in real estate than in securities.