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Politics : GOPwinger Lies/Distortions/Omissions/Perversions of Truth -- Ignore unavailable to you. Want to Upgrade?

To: American Spirit who wrote (43813)	4/30/2005 1:26:06 PM
From: geode00	Respond to of 173976

High-End Markets, Low-Income Households, Minorities May Have Too Many ARMs by Broderick Perkins Adjustable rate mortgages can help overcome the high cost of housing, but disproportionate use of the loans in some regions and by some demographic groups is causing alarm among financial experts and consumer advocates. Only 18 percent of consumers nationwide opted for adjustable rate mortgages (ARMs) in 2003, according to data from the Federal Housing Finance Board released by the Homeownership Alliance. But in Colorado and Michigan, 30 percent of home purchase loans for adjustable rate mortgages, the highest in the nation. Those states were followed by California (29 percent); Illinois (27 percent) and Washington, D.C. (25 percent). Smaller, more local markets reveal strikingly higher levels of ARM use. In California's Silicon Valley, for example, the use of ARMs was as high as 68 percent in November 2003, according to DataQuick. Ironically, the same high cost that drives home buyers to ARMs compounds the risk associated with them. Lower-income households, which can least afford the risks associated with ARMs, are also more apt to use an ARM to buy a home. Lower-income households, along with ethnic minorities, who reveal less knowledge about the risk of ARMs, are more apt to use them than others. "The good news is that about two-thirds of Americans not only prefer fixed rate mortgages but appear well-aware of the risks of ARMs," said Stephen Brobeck, executive director of the Consumer Federation of America (CFA) a Washington, D.C.-based non-profit consumer advocacy agency. "The bad news is that lower-income and minority Americans are not only those most likely to prefer ARMs, but also those with the poorest understanding of their risks," he added, referring to a recent CFA study. The study, "Lower-Income and Minority Consumers Most Likely To Prefer And Underestimate Risks Of Adjustable Rate Mortgages," couldn't be more timely. Interest rates have been trending up for the first time in years. When rates rise, so does the cost of ARMs. The CFA study found that 37 percent of Hispanics and 31 percent of African-Americans preferred ARMs, compared to 23 percent of whites. It also found that 33 percent of those with incomes under $25,000 preferred ARMs, compared with 20 percent of those with incomes over $50,000, prefer ARMs.... realtytimes.com ========= Hey, what's a new bankruptcy law for if not to punish the overextended, the sick and the poor when they can least manage it?