by- Suzie-Q @ 2:27 PM MST
Photo- HuffPo
AmericaBlog by; John Aravosis (DC) · 8/09/2007 11:36:00 AM ET
Stocks plunged this morning on more bad news for the mortgage market.
Soren Dayton, a conservative blogger I met at a recent event for the ONE campaign, raises a lot of interesting points about the coming mortgage debacle. His most interesting point: Those adjustable rate mortgages (ARMs) that everyone took on hoping they could sell before their rate increased? Well a huge chunk of them are coming due between now and the 2008 presidential elections. He thinks this issue is going to be huge in terms of electoral impact. A very interesting analysis.
Having said that, unless you got outright cheated on your mortgage – meaning, you got outright lied to about the rates, etc. – then I’m not having a lot of sympathy for folks who either didn’t pay attention when signing the dotted line, or who thought they’d make a fast buck before their “real” interest rate kicked in. And to the extent that people are going to make the argument, that I’ve heard, that lower-income folks just don’t understand complicated things like mortgages (how are they at throw-weights?), and therefore we need to cut them a break, then we have an even larger problem than simply fixing the current mortgages (and let me say right off, the entire basis of this argument strikes me as vaguely racist – “you know THOSE people, they just aren’t capable of understanding hard stuff”). We should change the entire way that mortgages are set up, if in fact we’re going to argue that an economic class of Americans will be per se cheated by a lack of understanding every time they enter into a mortgage (though that’s a rather slippery slope – how are they at buying a car, figuring out which insurance they want, filing their taxes?). That’s preferable, in my eyes, to talking about a bail-out that would do nothing to fix the problem that caused the bail-out to be necessary in the first place.
NEW YORK — Wall Street plunged again Thursday after a French bank said it was freezing three funds that invested in U.S. subprime mortgages because it was unable to properly value their assets. The Dow Jones industrials extended its series of triple-digit swings, this time falling more than 380 points.
The announcement by BNP Paribas raised the specter of a widening impact of U.S. credit market problems. The idea that anyone _ institutions, investors, companies, individuals _ can’t get money when they need it unnerved a stock market that has suffered through weeks of volatility triggered by concerns about tight credit and bad subprime mortgages.
http://www.huffingtonpost.com/huff-wires/20070809/wall-street/
I reject this argument.
Way too may people wound up with ARMs in attempts to do things like pay down medical debt. It should be noted that American Home was dealing more with “prime” borrowers than subprime.
There is plenty of reason to be sympathetic. My contempt lies with the mortgage holders who have pushed the ARMs into loanshark territory, with no economic justification. They are killing off their own businesses.
Jolly has a point here. American Homes saw this coming since 02 and now they are selling assets. Anyone with a mortgage have probly received from their mortgage company an option to take on a ARM to offset high 30 year and 15 yr. fix rates. This would give the home owner and option to pay off other debts or home improvements. Some pushed this option to folks that weren’t able to get a 100%, 30 year fix mortgage.
Now comes the fall and the foreclosures and yes a lot falls on companies like Home America.
Confuscius say:
“Those who live in bubble’s have to worry about sharp objects..”
Bwahahahhahahahaha!