Originally Posted by
Bruce Breedlove
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.
The lender may or may not have set them up. It all depends on their credit report. They may also be self employed or there may be other factors.
I agree with you that the greedy lenders are giving loans to people who can;t afford them. Of course, you would have to know exactly ow the mortgage business works to really understand things.
A hint: If you ever lose money as a mortgage broker, corespondent lender or lender, quit!
As for the home inspection, $139.00 for the most expensive item you will ever purchase? I don't leave my home for that amount!