Wednesday, May 10, 2006
Home Lenders: The Beginning of the End
So, Interest rates look like they’re going up again. There are a lot of people who’ve been making a pile of money in the lending business over the past few years. Now, they’re starting to feel pinch.
Truthfully, we’ll look back on these last five years as a time of crooked home lending. The lenders have been writing loans to people who shouldn’t have gotten them. Now, as their business dries up I read their latest trick……
The 50-year Mortgage!
So let’s see. We can have an interest-only adjustable-rate 50-year mortgage. So now we can still buy that $200,000 home for $800 a month. Wow. Truly Amazing.
What you should look for….
There will be a high default rate on the mortgages in the coming years. Once that hits, the pendulum will swing and home loans will be very hard to get. The government (read taxpayers) will get stuck with the tab.
The Realtors and Lenders need to face the facts… The real-estate boom is over. They should talk to the dot-com’ers too see how to cope with this. These lending tricks are getting old.
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