Timmy Geithner is a Debt Serf & Gary Coleman Pushing 99.25% APR Loans
The velocity of this implosion is amazing. Having inept and corrupt leadership is just adding gas on this fire.
itulips has the story.
Timmy Geithner the debt serf: Out of the pan and into the FIRE Economy
Who better to run the US Treasury Department than a poster child for debt serfdom?
Little is known about Geithner's finances, other than tax problems
The couple bought a home in the Washington suburb of Bethesda, Md., in 1992 for $275,000, taking a mortgage of $202,300. Through a series of refinancings and the sale of two properties, they climbed the economic ladder until they bought a house for $1.6 million in Larchmont, N.Y., in 2004.
All of the Geithners' mortgages - from big banks including Nationsbanc, which is now Bank of America; Chase Manhattan, which is now J.P. Morgan Chase; and Wells Fargo - carried adjustable-rate mortgages with the risk that annual rate increases could raise their interest payments to as much as 11.25 percent, though the couple tended to refinance or sell their homes before they faced a rate adjustment.
They also took out second mortgages, now known as home equity lines of credit, borrowing a total of nearly $1 million in 2002 on their second Bethesda home, which they bought a year earlier for $1,085,000.
In 2004, they sold that house for $1.45 million and bought their current house in the New York suburb of Larchmont with a $1 million Wells Fargo mortgage, later adding a $400,000 home equity line of credit, also from Wells Fargo.
(Hat tip to member BK)
Don’t know about you, but I want my Treasury Secretary to either own his house outright or if he is going to hold a mortgage at least show that he knows a lot more about household finance than Gary Coleman, by putting 20% down and taking out a 30 year fixed rate mortgage, to demonstrate that he is not financially illiterate. Taking out an ARM when mortgage rates are near historic lows and home prices are falling indicates he thinks either mortgage rates will remain low or decline from near 40 year lows over the course of the next 30 years, or housing prices will rise before his ARM adjusts so that he can refinance into a lower fixed or adjustable mortgage, or both. Anyone with half a clue about what is happening in the housing market knows that the likelihood of either happening is close to zero. Why can't he?
The rest of the story is here.
Another great video from itulip.