Eye Opener: Current Mortgage Defaults Not Due to ARM Resets
The political, business and media elite will have you believe that the current historic mortgage default rate is due to adjustable rate mortgage payment/interest rate resets.
Consequently all three entities are pushing for socialistic remedies. These so called remedies will only worsen the problem by obliterating what is left of the mortgage industry.
Iamfacingforeclosure dot com posts a very interesting article that points out current mortgage defaults are not solely due to ARM resets. Not yet anyway… The emphasis is mine.
The national foreclosure rate has climbed steadily throughout 2007. While most reports attribute the bulk of the foreclosures to ARM resets, the reality is that more than half of the borrowers who are defaulting are still in their first year of the loan.
The abysmal failure of Credit Ratings Agencies and risk management departments of financial institutions to properly assess the risk aspects of subprime loans, have allowed for loan underwriting so lax that borrowers are defaulting on the low teaser rate payments. You can just imagine what will happen next year when mortgage payments rise by an average thirty three percent.
Bank of America Securities estimates that rates will reset on $362 billion worth of adjustable rate subprime mortgages in 2008. At the same time, resets will also occur on $152 billion worth of other loans with adjustable rates, such as Alt-A loans and jumbo loans (loans over $417,000).
The article is a good read and I encourage you to check it out.
As with many, if not all important issues facing the country and it’s middle class today, the mainstream media and our politicians cannot be looked to as reliant information sources. Every tid bit of information disseminated by these self serving entitities is slanted with some type of agenda.
Their tactics include lies, half truths and outright omission. Perhaps that is why the general public is totally oblivious to the economic crisis unfolding before our very eyes.