Lenders Agree to Freeze Rates on Mortgages
Lenders Agree to Freeze Rates on Loans - New York Times
The government and mortgage industry came to an accord yesterday to freeze loan rates and offer relief for some sub-prime mortgage borrowers. This, like many other things the Bush administration has done, annoys me to no end. Consider this: you get an ARM loan at some dumb-ass interest only payment teaser for 5-7 years, followed by options, and I get the fixed rate for 20-30. You miss a couple of payments, I make all of mine and struggle to make ends meet. Later in life we should both be able to ease into our mortgage debt and plan for the future - but right now, the government gives you relief. It’s complete bullshit. Obviously this isn’t true relief, but some twisted bargain the government is making with the banks.
As noted by a commenter on Consumerist:
Why didn’t someone tell me I could buy a house I couldn’t afford at a ridiculously low interest rate and then have the government bail me out?
Indeed. They say “the plan is aimed at borrowers who can afford their existing rates and who are current on their payments, but who would face default when the rate resets higher.” Really? An estimated 1.8 million U.S. homeowners who took out loans with low teaser rates face pricey loan resets next year alone, the Federal Reserve has said. So basically poor planning and financial irresponsibility is now rewarded. Perhaps with the rising cost of oil we should all buy SUV’s we can’t really afford or purchase adjustable gas heat for our homes and wait for the government to step in there, too.
Filed under: Society
This is a really complicated thing, and yeah, it does kind of penalize people who made responsible choices by helping those who didn’t. If these people are struggling now, how did they ever think that they could afford their payment at 30-40% more? That’s the average amount that these payments will go up when the rates reset.
And I’m not totally angry with those getting help–most of these “teaser” rates are about 8% so it’s not like they’re getting a deal; they are still paying the consequences for bad decisions made years ago.
The people I feel the most sympathy for are those who have already gone through foreclosure–who would be eligible for help under the current guidelines but have already lost their homes.
that all sounds like greek to me!
screwed again…