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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum
GLD 378.35+2.7%Nov 10 4:00 PM EST
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To: KyrosL who wrote (26749)12/23/2007 10:20:49 AM
From: Ilaine  Read Replies (2) of 217653
 
What I am seeing with ARMs is that the people with problems are already terrible credit risks and the ARM resets at something like 12%, when they could just barely make the payments on the teaser rate, not to mention punitive prepayment penalties. Also, no equity, no refi.

So, you're right, it's not the ARM that's the problem, it's too high debt-to-income ratio, bad credit in general, bad deal-making. They could have saved themselves a lot of grief by hiring a good financial adviser and good lawyer in the first place.

But that would mean hiring someone who was going to tell them, "wait, stop, there are problems!" And these are people who can't see two days into the future.
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