Adjustable Rate Mortgages
Unfortunately we are all aware of the industry scandal, and the sub-prime loan issues. I get a little upset when they try to hang the blame on mortgage brokers. Personally I think it is the Banking Industries attempt to put the independent broker out of business. The Broker surely didn't write the guidelines but by golly he must conform to them. So,... who's fault is it?
Since all the news is bad and blaming, here is a story of a lady, taking advantage of all the critical news. That really torques me off. Perhaps you will remember the article. I've tried to find it for your reference but have been unsuccessful. Let me know if you remember or can find it.
This sweet hard working woman, single parent of 4 or 5 kids, working in the medical profession, refinanced (or purchased, I can't remember) their loving home. The financing was an adjustable rate mortgage and her payments to start out were around $1700. Then the rate adjusted up and her new payments were about $300 more per month. Then, ... unfortunately she was laid off at work. Woe is me. Now she is about to lose her home and she and her kids will be on the street. In this news article or report she claims she did not know she was in an ARM and did not know how they worked.
Ok, first of all I am really sorry that she is a single parent for whatever the reasons are. And, ... I am really sorry that she lost her job. Sincerely! I'm sorry she is losing her home. BUT to say that she didn't know it was an ARM or how they worked!!! Give me a break!!
This woman is in the medical field and obviously doesn't mop floors if she qualified for a $1700 mtg payment. This woman knew she was in an ARM (there are mandatory disclosures that must be signed on all arms) and there is no doubt in my mind that she understood how adjustable rates ADJUST! The only thing she didn't count on was losing her job.
So, the poor broker get's blamed and stabbed in the back again!