This whole mortgage debacle has got me nervous. Not so much for fears about my own home loan, but more related to how this might affect my ability to sell my house if needed and/or the risk it poses to my neighborhood. I hear stories of whole communities becoming ghost towns and even those who have great credit and manageable house payments are financially ruined because of so many foreclosures all around them.
Maybe I’m completely naive or maybe I’m simply overstating the obvious but isn’t the solution to the home loan rut to just back off on the insane ARM monthly increases? What good does it do for a mortgage company to own a bunch of houses that won’t sell because the area is depressed from their own predatory lending practices? Instead of trying to milk people for unattainable amounts of money, wouldn’t it make sense for these loan companies to simply let whatever deal they had before ride or at least only bump up the loan payment slightly? It sure beats having nothing, but again, I’m not a mortgage guy.
Up until these 2 year ARM loans got to the “meltdown” stage people have been paying their mortgages and otherwise been model citizens, but even somebody with stellar credit isn’t going to try to keep up with $200-300 increases every month. I know the onus is on the person who signed up for these ridiculous loans, but perhaps a reality check could save all of us a lot of pain and suffering. Sure you might not make as much money as originally planned, but it beats sitting next to the people you foreclosed on in bankruptcy court.
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