| Defaults moving beyond sub-prime
Thought the mortgage meltdown was just a sub-prime affair? Think again. There's another time bomb waiting to explode, experts say: risky loans made to people with good credit.
So-called pay-option adjustable-rate mortgages, or option ARMs, were the easiest and most profitable home loans for lenders and brokers to make for much of this decade. Last year, they accounted for about 9% of the volume of all mortgages made in the U.S. and were especially popular in California, Florida and Nevada -- states where home prices rose the most during the housing boom and are now falling most sharply.
An option ARM loan gives a borrower the option of paying less than the interest due, causing the loan balance to rise. If it rises too much -- say, by 10% or 15% -- the opportunity to make a low payment vanishes and the required payment skyrockets.
Jumbo gamble for county home sales part of stimulus plan
That was the debate Friday in the Sonoma County real estate community over a key provision in the federal economic stimulus package that would make it easier and cheaper to take out big home loans.
The plan would temporarily raise a key lending limit, freeing many buyers from the necessity of using high-interest "jumbo" loans to buy homes in Sonoma County.
Many agents and mortgage brokers seemed optimistic that the measure could be just the incentive some buyers need to re-enter the housing market, firm up home prices and bring the long-predicted bottom into sight.
"I think it's great and important and it's really going to get some people off the fence and into the market," said Timothy Hedges, manager of the Prudential California office in Sebastopol.
Reader comments: Don't vote for socialism
For those of you who continue on a daily basis to throw out the police, fire dept etc as the reason to take this country into complete socialism don't understand the concept of socialism. Maybe a voucher for you to go back to school would help you understand it better or a one-way ticket to Cuba, North Korea, Europe or many other Socialist states to get a better understanding.
For those who have never read the Constitution, it doesn't guarantee a fair playing field, but it does guarantee the government to provide for the defense of the country.
As for the daily dribble from ETBass, the requirement to have checks go to those who don't pay taxes came from Chuck Schumer. Please get your facts straight before you make silly comments.
There are so many falsehoods presented as facts on these pages; mainly by the Rush haters.
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