Steve Powell of Oradell admits he was "a little apprehensive" about refinancing to an adjustable rate mortgage. ARMs, for short, these mortgages were portrayed as one of the villains of the housing crisis -- luring home buyers into payments destined to spike beyond their means and driving up foreclosures in the process.
Moves by lenders to amend their approach to dealing with delinquencies have given hope to some homeowners teetering on the brink of default. That combined with a Bush administration proposal to freeze interest rates for some adjustable-rate mortgage holders represent small but promising steps to address the crisis. President George W. Bush described the effort as a "sensible response to a serious challenge." According to the White House, as many as 1.2 million Americans stand to benefit. Industry experts, however, have revised that statistic downward to between 250,000 to 400,000. S. Treasury Secretary Henry Paulson played a major role in brokering the agreement with lenders and conceded that it was "not a silver bullet" but would give the nation a "chance to work through a housing cy...
Adjustable-rate mortgages (ARMs) have garnered some bad press during the recent housing crisis, often getting lumped in with other types of mortgages, such as interest-only, zero-down-payment and "pay-what-you-want" loans, as products that could be dangerous for homeowners. In recent months, particularly as mortgage interest rates have dropped to historically low levels, many homeowners with ARMs have been refinancing into fixed-rate loans. Homebuyers primarily are opting for fixed-rate loans, too. In fact, the Mortgage Bankers Association Weekly Mortgage Applications Survey typically shows that applications for fixed-rate mortgages currently represent approximately 80 percent of all mortgage applications.
Moves by lenders to amend their approach to dealing with delinquencies have given hope to some homeowners teetering on the brink of default. That combined with a Bush administration proposal to freeze interest rates for some adjustable-rate mortgage holders represent small but promising steps to address the crisis. President George W. Bush described the effort as a "sensible response to a serious challenge." According to the White House, as many as 1.2 million Americans stand to benefit. Industry experts, however, have revised that statistic downward to between 250,000 to 400,000. S. Treasury Secretary Henry Paulson played a major role in brokering the agreement with lenders and conceded that it was "not a silver bullet" but would give the nation a "chance to work through a housing cy...
COLUMBUS -- They're called "teaser rates" and they could make Ohio's mortgage foreclosure crisis even worse in coming years. The loans are for adjustable rate mortgages (ARMs) with low, fixed interest rates for the first two or three years. After that initial period, the rates increase, as often as every six months, so that monthly mortgage payments grow dramatically, according to a report released Thursday by the Coalition for Homelessness and Housing in Ohio.
... years to subprime borrowers were adjustable-rate mortgages (Lockett, 2008). After U.S. house p...
After more than four years of a housing market crisis and major changes in credit card terms, it may be hard to believe that many consumers don't know what types of loans they have. Do you have a fixed-rate mortgage or an adjustable-rate mortgage? What might cause your interest rate to change? How often could it adjust? And what about your credit cards? Do they have a fixed or variable rate?
... finance system was at the center of the crisis., it's not surprising that the Dodd-Frank Act atte...With an expected failure rate of 90 percent, those defaults may cost banks anoth.... The pay-option adjustable-rate mortgage (option ARM) is a case in point. Vet...
Just when you thought it was safe to wear bell-bottom pants again, that other nightmare from the 1970s -- double-digit inflation -- is also about to make a comeback as a result of the European financial crisis. It will likely be a year or two before the fun and games get into full swing, but when they do, don't have an adjustable rate mortgage. Inflation occurs when there is surplus money floating around the economy, and a surplus of anything, be it ham or housing, causes its value to fall. In simple terms, inflation is caused by a government printing more and more bank notes to fund itself. A famous example was Germany after World War I. In 1918, one U.S. dollar bought 10 German marks, but five years later, the same dollar bought 4.2 trillion marks. That situation is often b...
THE CONSUMER Financial Protection Bureau has begun testing two prototypes of mortgage disclosure forms that the new agency hopes will help borrowers when applying for home loans. So, why should this matter to you?
...The housing crisis that helped plunge the nation into a recession rev...
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