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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: bentway who wrote (177414)	1/16/2009 11:31:07 AM
From: GraceZ	Read Replies (2) \| Respond to of 306849

Not LIBOR, but one of the published Fed rates. I'd have to look up which one. My APR is currently below 5% on it. See, now this is why I wonder how it is that so many people are still in so much trouble with their ARM resets. They must have had ARMs that had bottom limits or really high premiums over the index rate. Now I have a credit card that is variable from Wells Fargo. It is suppose to be prime +1% but they weak out and say that the lower limit is 5.75% (where it sits right now since prime is well below). As I stated earlier, my old HELOC ARM floated down to around 3% at one point because it had no lower limit. It did have a maximum reset of 2 percentage points either way. Yeah, they do the same with me. They want me to "lock in" 7% when I'm currently paying about 4%! Yeah, this is where I expected that most fixed HELOCs are sitting, the 7 to 8% level, a rate that seems unreasonably high in this environment. I don't care how deductible it is. I have a sister who is underwater carrying a 8% 30 year primary with a 9% HE 10 year fixed (they were on their way to BK so they took what they could get---could you guess?). Along with falling and fallen housing values in her area, she's a little worse off every single month that passes. Normally I'd never suggest someone is better off walking away, but in her case she most definitely be better off cutting that lead weight. I don't have the heart to tell her this, she keeps holding onto hope. Hope kills you when it comes to a financial crisis of this magnitude.