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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Wyätt Gwyön who wrote (36023)	7/14/2005 3:21:03 PM
From: TimbaBear	Respond to of 110194

Darfott As soon as you see this phrase: a buyer who made only minimum* payments* in anything to do with a mortgage, you are talking a negative amortization product. Normally amortizing mortgages don't give you payment options. In the case of ARMs the payment may change, but that is the lender doing the change, not the borrower. In the case you cite, I don't know if the broker has his facts correct or not, but another way of looking at it is: The borrower pays 12 X 1718 = $20,616 in a year and, at the end of the year is a minimum of $5400 further in the hole. This may be an acceptable cost of doing business if you are a speculator in housing and are correct in your play. However, for home owners not speculating and for speculators with bad timing, it doesn't leave much room for error. Error in this case is a rising debt against a stable or falling asset. Timba