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Non-Tech : Deflation -- Ignore unavailable to you. Want to Upgrade?

To: Ilaine who wrote (400)1/6/2008 10:47:39 AM
From: carranza2  Respond to of 621
 
These are people with modest incomes, they can't afford it, and then the lenders foreclose, but nobody buys the properties, so the bank buys them, and they sit vacant, depreciating.

Proving my oft-stated point that ARMs required a rational lender to underwrite even more conservatively than for fixed rate. Problem being, of course, that the conservative and prudent and therefore more credit-worthy don't do ARMs. They pay cash or put down a lot more than 20% when interest rates are historically low.

Lenders can be such idiots. On the other hand, they no doubt cleaned up on fees and now their stupid underwriting is someone else's problem.



To: Ilaine who wrote (400)1/8/2008 4:24:46 AM
From: Maurice Winn  Respond to of 621
 
I suppose it's a statistical game and they have enough people who manage to pay that it's worth having, for example, one in five go under. Countering those losses they have the others succeeding in making the increased interest payments.

Mqurice


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