Rewarding Stupidity
Saturday, December 01, 2007
I happened across an article today about a plan by the U.S. mortgage industry to "freeze rates" for certain folks who signed up for an ARM back when interest rates were nice and low but now are feeding the mortgage industry crisis as interest rates rise and the risk of default and foreclosure starts to loom.
So basically, the way it sounds to me is that people who weren't smart enough to see the potential issue (oh, interest rates actually go up?) are now going to be protected - and, indeed, rewarded - for their foolishness at the expense of everyone else who's going to have to pay for their rates to be frozen.
We're rewarding stupidity.
Of course, this isn't the first time something like this has happened. It seems like anytime the moron train gets rolling everyone who jumps on is saved when big brother steps in to bail them out. (It's those of us smart enough to avoid the problem that have to pay for it.)
I'm irritated. I didn't buy a house during this most recent boom, so now housing prices are through the roof and now interest rates - if this plan goes through - are going to be artificially higher (since no bank will actually lose money on a deal)... consequently my ability to buy a home in the foreseeable future is diminishing daily.
Grrr.
So basically, the way it sounds to me is that people who weren't smart enough to see the potential issue (oh, interest rates actually go up?) are now going to be protected - and, indeed, rewarded - for their foolishness at the expense of everyone else who's going to have to pay for their rates to be frozen.
We're rewarding stupidity.
Of course, this isn't the first time something like this has happened. It seems like anytime the moron train gets rolling everyone who jumps on is saved when big brother steps in to bail them out. (It's those of us smart enough to avoid the problem that have to pay for it.)
I'm irritated. I didn't buy a house during this most recent boom, so now housing prices are through the roof and now interest rates - if this plan goes through - are going to be artificially higher (since no bank will actually lose money on a deal)... consequently my ability to buy a home in the foreseeable future is diminishing daily.
Grrr.
posted by Burton at 9:43 PM
1 Comments:
There is such a high volume of homes on the market right now prices are just about what you want them to be. I've seen homes listed for 500k on the market for 22 months. yeah they will deal for that home. Not only would you be able to grab it for 400, but probably have all the things added or upgraded as well. I know the prices seem high on this. But the same is true for 300k home. May not get it down to 200, but man there are some great deals out there. Watch for it to be even better by the end of '08. I don't think your chances are shrinking, the potential is just starting to grow.
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