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Mortgage? What Mortgage?

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March 28, 2007 – Comments (2)

Original here.

Excerpt:

I wish I could say this surprises me, but it doesn't. An interesting poll performed by Bankrate.com (Nasdaq: RATE) reveals some pretty disturbing realities about American borrowers. The poll, discussed in detail here, found that a full third of borrowers had no idea what kind of mortgage they held.

Worse yet, 58% of ARM borrowers had no idea what they were going to do when the rate ratchets upward. Thirty-six percent of respondents said they planned to refinance into a long-term fixed mortgage, but for many of these borrowers, that may be tough, given the new tightening of lending standards in the face of the fallout at subprimes like Novastar Financial (NYSE: NFI), New Century Financial, and Countrywide Financial (NYSE: CFC).

And, now ... Cue the victim chorus. Here's an example of the kind of bogus heartstring pluckers we can expect from the press. This Washington Post tearjerker carried a subhead reading "Economic Success Story Turns Sour ..."

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2 Comments – Post Your Own

#1) On March 28, 2007 at 11:05 AM, Scotte68 (< 20) wrote:

Bravo!  Your comments are right on the money! 

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#2) On March 28, 2007 at 2:07 PM, mountainecho (< 20) wrote:

Do you really think it fair to equate the malfeasance of a financial professional who offers a debt product whose obligations the prospective debtor cannot possibly, in the long-run, hope to meet with the wishful thinking of the financial naif (or, yes, the witless boob) who longs to be a homeowner?

A person who starts out blind to financial realities and who is rendered even more so by the shiny prospect becoming a homeowner seems pitiable. But a person already possessing wealth and financial acumen who elects to become still wealthier by securitizing someone else's naive and impossible dream is contemptible. 

There may be plenty of blame to pass around, but you do no one a service by pretending that it's one size fits all. 

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