Richard,

ARMs and the risks associated with them are one thing. What we have in this case is a SCAM.

The lender set this couple up with an ARM at 10.75%. 30-year fixed-rate mortgages are currently at 6.3% or less. ARMs are typically lower than fixed-rate mortgages (with the risk of going higher). I have seen ARMs offered at 5.7%. An ARM today at 10.75% is a rip off.

These buyers obviously did not know anything about buying a house and trusted their real estate agent to guide them through the process. Unfortunately they fell right into the trap set by the RE agent, appraiser and lender. I hope these criminals spend a few years in prison for this crime.

__________________
"Baseball is like church. Many attend but few understand." Leo Durocher
Bruce Breedlove
www.avaloninspection.com