> And most of the balloon mortgages were on homes that sold for 250,000 or more. The poor were not buying homes that ran 250,000.
At the peak of the real estate bubble, a starter home in Detroit Metro would have been well over 100K. That would be a 1000 square foot, two bedroom house built in the fifties. And in many cities, that house would have been much more. Yes, when variable-rate, balloon mortgages first came out they were more popular with upper-middle class buyers who understood what they were getting into. But by the early aughts, many lower-income buyers with marginal credit were opting for them, as they could more easily qualify. In 2006, adjustable-rate mortgages comprised 27 percent of mortgages.
I personally know a number of folks who got into trouble with their mortgages during the crisis. They all had adjustable rate mortgages, although most had other problems that contributed to them losing or nearly losing their homes. One was a self-employed carpenter who was in the National Guard and was called to active duty. Another worked for Collins & Aikman, an automotive supplier run into bankruptcy by former Reagan OMB Director David Stockman. In both cases, those homeowners had no business taking out adjustable-rate mortgages. But they did.
To give an example a little closer to home, when my stepson returned from the Marines, he took out a mortgage to buy his house back from us. (We bought it from him when he enlisted after 9/11.) We initially steered him into a fixed-rate mortgage with a reasonably reputable lender. But he walked out on that when he found that they wouldn't let him take cash out of the home's equity. (He wanted to take cash out to start a business.) So he looked around and found a shady broker, who set him up with a mortgage where he could take out cash. The broker even fronted him the "down payment", which I'm told is illegal. I'm not going to describe the outcome of all this, which has been painful to everyone in our family, but I'll note that the mortgage he took out was adjustable-rate. And the loan was for less than 50K.
Upload one or more videos to your post. Photo filesizes should be less than 300K and Videos, less than 2MB. Formats allowed are gif, jpg, png, ogg, mp4, mov, and avi. Be sure to use filenames without spaces or special characters, and filetypes of 3 digits lower case.
We sell tractor parts! We have the parts you need to repair your tractor - the right parts. Our low prices and years of research make us your best choice when you need parts. Shop Online Today. [ About Us ]
Today's Featured Article - Show Coverage: Journey to Ankeny - by Cindy Ladage. We left Illinois on the first day of July and headed north and west for Ankeny, Iowa. Minus two kids, we traveled light with only the youngest in tow. As long as a pool was at the end of our destination she was easy to please unlike the other two who have a multitude of requirements to travel with mom and dad. Amana Colonies served as a respite where we ate a family style lunch that sustained us with more food than could reasonably fit into our ample physiques. The show at Ankeny
... [Read Article]
Latest Ad:
1964 I-H 140 tractor with cultivators and sidedresser. Starts and runs good. Asking 2650. CALL RON AT 502-319-1952
[More Ads]
All Rights Reserved. Reproduction of any part of this website, including design and content, without written permission is strictly prohibited. Trade Marks and Trade Names contained and used in this Website are those of others, and are used in this Website in a descriptive sense to refer to the products of others. Use of this Web site constitutes acceptance of our User Agreement and Privacy Policy
TRADEMARK DISCLAIMER: Tradenames and Trademarks referred to within Yesterday's Tractor Co. products and within the Yesterday's Tractor Co. websites are the property of their respective trademark holders. None of these trademark holders are affiliated with Yesterday's Tractor Co., our products, or our website nor are we sponsored by them. John Deere and its logos are the registered trademarks of the John Deere Corporation. Agco, Agco Allis, White, Massey Ferguson and their logos are the registered trademarks of AGCO Corporation. Case, Case-IH, Farmall, International Harvester, New Holland and their logos are registered trademarks of CNH Global N.V.