So it appears that sub-prime mortgages with ARM rates are due to adjust upward, folks can't afford the increase, some are already behind on their payments, home loan defaults are up, and now these folks are getting relief in the form of a mortgage rate freeze. There are several things to consider here.

I am not laughing over folks losing their homes, and for some responsible borrowers who took advantage of these type of loans for lack of a better alternative, I wish them well. However, most of these loans were developed, aggressively promoted, and granted to less than credit worthy borrowers, who under normal circumstances would not qualify for a home loan. They purchased homes beyond their means, knowing what was going to happen at some point, and now they're getting a bail out? EXCUSE me, but.......... what happened to being responsible for your decisions and choices?

The problem is not all one-sided.
First, lenders and investors, and mortgage companies who were all too eager to put these loan options out there, assumed the risk this might occur when granting credit to questionable borrowers. Now, when these loans are starting to go up per the contracts, and defaults are rising, why are they so surprised? Seems to me this was a marriage made for disaster from the get go.

Why are these borrowers any different from the rest of us who diligently pay our fixed-rate mortgages, struggle with our own finances and made wiser decisions when buying our homes? I am a single parent, bought a home 11 years ago. The first 5 years were tough, even with a fixed rate mortgage. I never received ANY assistance anywhere along the way, and never expected any.
It has been noted that the rest of us will bear the burden to bail these folks out? Not NO, but H3LL NO! I live paycheck to paycheck like most people. Where's MY relief?

On the other hand, the ramifications of NOT doing something is equally disturbing.
Sales of existing homes are slow. I've noticed it taking much longer for homes in my nighborhood to sell than in previous years. This is a scenario repeated all across the country.

Property values are beginning to stagnate due to the glut of housing on the market. If all those loans were to go into default and the foreclosures hit the market, it will be even harder for folks to sell their homes at a fair price. I had wanted to put mine on the market, but I'm not willing to throw away my equity. I don't HAVE to sell, I just wanted to in order to move closer to work and buy another. Looks like I'll be sitting tight a few more years.
Just wondering what some other folks think of this development?

I'll chime in on this one too!!!

What in the hell is our government stepping in for??? I'm NOT for people losinf thier homes, etc. But dammit its THEIR OWN FAULT! I was raised with a saying..."You made your bed..now you lay in it".

Maybe next time they will put some THOUGHT into thier actions!

Well, I don't own so maybe I have no business chiming in here. But, a lot of the lenders took huge advantage of a lot of people, people who were not stupid but uneducated and didn't have money to hire attorneys or whatever to really fully explain what they were getting themselves into. The lenders made things so ambiguous in some cases that no one can figure out what was done. I'm not saying this is true in all cases, I think a lot of people took advantage of a hot market, thinking it would stay that way and they could bail anytime and it's coming back to bite them now. But, in some cases, it really is a case of deception on the part of the lenders.

As for what to do, who knows? I have no answers for that.

I certainly agree with you on the lenders "taking advantage" of the uneducated as well. However, its still thier fault. Even if "baited" in, COMMON SENSE tells you to "read the fine print" and you better think what "could" happen.

No one forced anyone into this. They made it all "look" to be financially "great" and people went "for the MONEY". So let them learn that lesson now...and hopefully they will learn for the future...NEVER think a company is going to give you something for free. They are there to make a profit, even if you can;t see how its done, THINK and read the fine print, because its there somewhere.

Another old saying I was raised with.. "If it sounds too good to be true...then it probably is". A little thought can go a LONG way.

Yup, I agree. I know that, you know that, but unfortunately, a lot of people don't, I don't know how they missed that particular lesson But still, the lenders should take some responsibility, they assumed just as much of a risk, knowing that people didn't really get what they were doing and certainly wouldn't be able to afford it when things went to hell. A little more corporate responsiblity in this country wouldn't hurt at all.

I agree that the lenders should suck up their mistakes, and in a way they will. They won't be getting those increased interest
payments they were expecting....at least not in the next 3 years. ...

Nope, they won't. It's far less expensive, both for themselves and everyone else, if they suck it up and work with the borrowers to try to come up with a solution. Foreclosing and reselling is expensive, both for themselves and the economy is a whole. Whether or not the government should be involved, well, that's a whole other issue.

Those who do not learn from the past will be doomed to make the same mistakes in the future... it's an old saying, but very true.

You bail them out now, MOST will go back and do the same stupid chit again and again.

Sumthing...you're probably right about that, but hopefully, this kind of predatory lending practice will be curtailed.

if they are lending to those not worthy in the attempt to

stay in their pocket for more than they would actually

make lending to credit worthy responsible borrowers

then they should not get their increases

and the govt is not bailing them out

you need to look at it from the govt. point of view

if a this loans default who does it cost

the lender

not really

they got the cost of writing the loan up front at closing

plus the interest on payments that have been made so far

which for the first 10 years

the majority of the payment is interest

when the loan receiver defaults

the lender writes off the loan as a loss

thus not having to pay any further tax on the loan

and being a loss it also takes away from the profit

thus lowering the tax on other loans

the govt is trying to keep from having to bail its self out

predatory lending costs the taxpayer money

not the lender

That's the scary part adj4u. The rest of us will pay for the nit wits who took out those loans and can't pay them..... and the lenders get their write offs....

well they should enforce the laws and quit being


by the corporation

for the corporation

they get the lobbiest coming to d c

and courting the congress

and giving them this

and giving them that

so they change the grammar here

and add/remove a word their

and wala

the law is completely different

and then ya cant be in your car with out a seat belt

or ya cant smoke

so the insurance company costs go down


and


never mind

i need to stop

getting off subject

sorry