Quote:
Originally Posted by Sheltiedad
Is the problem due to adjustable rate mortgages? The only way my mortgage payment changes is if the escrow changes for some reason (insurance rate changes, etc.)
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I would say for the most part, adjustable rate mortgages is the culprit. That along with unscrupulous real estate agents (not ALL of them are bad), and mortgage brokers. During the height of the market about 2 years ago, they were doing loans without full docs. I know this for a fact. Some loan companies were not requiring proper documentation of income (i.e. W-2 forms, pay stubs, etc). People were buying homes with 0 or 1 percent interest only payments for a period of time expecting to re-finanace in a couple of years. They (as well as the real estate brokers & loan officers) knew full well that they would not be able to qualify for that loan - but proper documentation was not required. Well........ the market took a down term and guess what.... some of these same people owe 100K or 200K more than the house can sell for now. So they are walking away from them. This is not hearsay - but is fact. I personally know of two different families who fall into this catagory. So sad that they got all caught up in the frenzy a couple of years ago.
And what kills me............ they just keep building more homes... I don't know when it will stop. The market just continues to fall.
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