On Feb 19, 7:33 pm, Vic Smith wrote:
On Thu, 19 Feb 2009 14:48:53 -0800 (PST), Frogwatch

wrote:

It's a big mess and I have no sympathy.
Flippers took the risk and should pay.
Equity borrowers should pay too
People who made zero down mortgages will never be good credit risks
and they have nothing at risk, I have no sympathy for the lenders in
that case.
Who but an idiot would go for an ARM when the fixed rates were so low?
STUPID SHOULD HURT

ARMs are nearly always lower than fixed.
I did a 3-yr ARM refi at 2.75 when the lowest fixed 15 yr was @6.
Anyway, my eyes were wide open and I had a backup plan if the rates
went up hard when they reset.
The woman I mentioned works and can afford to pay her mortgage
at a real market rate.
Purely a victim of predatory lending. I don't care if she isn't a
sharp tack financially. She shouldn't be taken advantage of like
that.
If your mutual fund suddenly went negative due to malfeasance, you
wouldn't be calling yourself stupid.
You're welcome to call yourself stupid if you've suffered equity
losses legitimately however. You rolled the dice.
But I don't think predatory lending is the root cause of the disaster.
Most of it is interest-only loans, flippers, and equity pullers.
Not "poor people" in most cases, though they might be now.
Again, until somebody actually collates the defaults, it's hard to get
a handle on it.
This is a case where the gov temporarily hiring 10,000 out of work
accountants/investigators to sort things out would pay off.
Get it done fast, and don't pay off the deadbeats.
Things will get back to normal. And by normal I don't mean what's
been normal for the last 10 years or so.
I mean previous home market normal.
20% down and proven income to afford the note payments.
Home prices will adjust to that supply/demand reality.
Hardly the rocket science we boaters are accustomed to here.
Wait....I don't have a boat yet.
Hmmmmm, maybe I can refi and pull some cash out for that.
Reminds me of a commercial that was running until recently, maybe
Geico.
"Cash out some of that equity!"
Aw, ****. How did we get where people thought that was the way to go?

--Vic

If the interest rate truly determines whether or not you can pay a
mortgage, then in my opinion you should borrow less. Using the ARM
rate to justify overborrowing is silly. ARMs are ALWAYS risky.
If you borrow needing two incomes to pay and you lose one income, no
sympathy from me.
HOWEVER, if you buy a small house and your payments are less than 25%
of a single income and then you lose your job, OK you have my
sympathy.
Other peoples failure to plan for contingencies should not allow them
to rob me to pay their bills.