The Residential Real Estate Crash Index Message Board

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Strategies & Market Trends : The Residential Real Estate Crash Index

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To: Crimson Ghost who wrote (27939)	3/9/2005 6:16:24 PM
From: orkrious	Read Replies (3) of 306849

tonight's RE Mania Chronicles from Fleck Lastly, thanks to a reader who forwarded today's entry for the Real-Estate Mania Chronicles. I would imagine there are more than just a few people who share a similar attitude to the person he describes: "At lunch the other day, I overheard two colleagues discuss their mortgages. One of the two has a 100% no-down-payment mortgage with an interest-only loan. The other fellow asked him if he was worried about increasing interest rates. His reply: 'No. If the interest rates go up, or if housing prices go down, I don't lose anything. I'll just stop making payments and turn the house back over to the bank. It cost me nothing to get in the house, and I can walk away with only a ding on my credit report.' I don't know how many of these type of loans are out there, but it seems to me that these people really do have little to lose if housing prices go down or interest rates go up. It's the banks that will lose big-time."

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