SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum
GLD 393.24+1.1%Dec 11 4:00 PM EST
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: TobagoJack who wrote (26049)12/5/2007 6:02:09 PM
From: KyrosL  Read Replies (3) of 218431
 
Your friend got it all wrong. The main beneficiaries of this freeze, if it succeeds, will be the lenders, not the homeowners.

First of all, the so called teaser rates are not 1% but typically one or two percentage points higher than standard fixed rate mortgages. More like 7 or 8%.

Second, the best course of action for most of the subprime borrowers is to immediately return their houses to their lenders (the vast majority are upside down), get a rental for half the net cost of their present house and use the savings for a down payment on a fixed mortgage house five years from now, when house prices will most probably be lower than today. If Mr. Paulson and the politicians wanted to help those subprime borrowers, they would put in place a program to do exactly this.

Of course, this best course of action for the borrowers will be very bad for housing, the economy, and the lenders.
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News