<<Some borrowers are opting to sell homes they can no longer afford. Last year, James Zito, a retired salesman, refinanced into an option ARM in a deal that allowed him to pull out $50,000 in cash without increasing his monthly payments. Mr. Zito had been pulling out cash when he refinanced every three or four years. But this time, when his mortgage payments began adjusting, he realized he couldn't afford the higher payment, and refinancing yet again wasn't an option.
In June, Mr. Zito sold for $745,000 the three-bedroom, two-bath house in San Jose, Calif., he had lived in for 43 years and bought a smaller home in a retirement community. "I wanted to get out from under the mortgage," he explains. With an option ARM, "your monthly payment increases, and you don't make any headway.">>
I find it astounding someone of his age is doing. A whole nation hooked on debt that doesn't have any recollection of the great depression and real hard times is now as old as 70. Perhaps that is a signal in and of itself. |
