As should be expected, the main problem in prime loans is with ARMs or principal-only starter payments. While some people with ARMs may have been deliberate dice-rollers, I’m guessing some of them were on the borderline of prime-land, and an ARM was the only way they could enter.
Oh, and take note of predatory lending in the case of Brenda Harris:
At the time (of her home purchase), she asked for a loan that could be refinanced after one year without penalty. She said her broker had told her a week before the closing that the penalty would extend until May 2009 and that she reluctantly agreed because she had already started moving.
Even worse in our negative-savings-rate country, more than 5 percent of home-equity lines of credit are in default.
In other words, more people with less money to spend, meaning the current recession is not likely to be the most mild one.
No comments:
Post a Comment