Didn’t people who bought adjustable mortgages know their payments could go up?
to higher than they could afford? I’ve never understood why anyone would want that. I’ve always thought it was better to have a fixed rate and pay the same amount every month, like rent, that you can plan on and budget for, even if you pay more in the long run. So aren’t people who accepted these adjustable mortgages at fault for bad decisions? What am I not understanding?
Tags: bought, Could, didn't, Know, Mortgages, Payments, People, Their
i agree….
edited: to put it bluntly, this is America. If you don’t blame others for your ignorances and dumb decisions then you’re just not American
You are hitting it on the head…They SHOULD HAVE KNOWN!
stuck on stupid comes to mind
Most of these guys should have known better. Some were unsuspecting, unsophisticated borrowers that got duped. Many were greedy investors looking for a quick profit. I want to know why the lenders winked at these red flags and the bank regulators were out to lunch when the criminals stepped in to exploit the system?
People should know.. But you have to keep in mind that we are not all alike. I couldn’t believe when my own brother told me he had an adjustable mortgage loan for his house. He got the loan through a “friend” who forgot to explain to him that the loan was not level. Since it was my brother’s first home he didn’t know of the different type of loans out there. I believe that just like my brother there is a lot of people out there who does not have the knowledge and rely on their agent for advice and guidance on their decisions. Unfortunately many loan officers are not as ethical as they should be..
You are correct. But, the people that went into these loans were suckered in by the low down payments, initial monthly, payments. Nobody reads the fine print in all those contracts.
50/50 on the owner and lender.
When I bought my house, my lender offered me the adjustable, but showed me what could happen in the worst case scenario. Glad I went with the fixed rate. My lender was an honest one.
If they didn`t know, they were not too bright. They probably thought they would be able to get a fixed morgage after paying down the principal for a few years with the adjustable morgage. When they found out they couldn`t and owed too much to sell their house then they were really in a fix. They then knew it was a bad decision and are blaming the morgage companies for making it easier for them to buy a house instead of owning up to their mistake.
Most people are “forever the optimist”.
They think and truly believe the bad times and not-so-pleasant events will by-pass them or they will get around them.
Looking back, did you know this situation was happening? I don’t know if you did or not. I certainly didn’t see it coming.
BUT hindsight is always 20/20.
BTW, there are fixed rate mortgages – with a prepayment penalty AND negative amortization.
Here’s what you aren’t understanding:
MAYBE – just maybe – the great majority of those folks weren’t told THE WHOLE truth.
The reps who took the apps may not have known what they were selling. They weren’t properly trained top preset the “worse case” scenario.
For every reason you can think of why those folks got in the situations they did, there’s probably AT LEAST one reason why should not have got in those situations.
LOTS of folks want “THE American Dream”. When you bought your home [and other properties, times were A LOT different. Mortgages were A LOT different.
A.R.M.s were different.
I truly believe my little bit of “thinking and typing out loud” enlightened you and every one else who thinks along the lines you do.
Thanks for asking your Q! I enjoyed answering it!
VTY,
Ron Berue
Yes, that is my real last name!
in this country, people want everything and they want it now, even if they cant afford.
thats why people have so much credit card debt and buy houses they cant afford. eyes are bigger than paycheck.
People SHOULD have known.. but think of how it was probably presented to them:
“You can have this fixed rate mortgage at 8% or you can have this adjustable rate mortgage that is at 3.5% right now!”
For some people, this huge difference in interest rate made possible the dream home they wanted. Why? Becuase they thought it would never get THAT high. Well.. it did. Us americans don’t tend to take our financial concerns into our own hands.. .we seem to prefer to let others do it for us. The home owner that bought a house with a ARM probably was presented with a CURRENT monthly payment and just assumed that it coudn’t go much higher than that for the next 30 years. I blame the lenders, primarily, because i have worked with three that have tried to steer me down inconvenient paths that look good now, but in 10 or 15 years, look horrible.
You are right. People with adjustable rate mortgages were foolish to get into them. Usually, they were greedy, wanting more house than they could afford. So they borrowed on a very low “teaser rate.” They were too stupid, greedy or both to care whether it would go up in the future.