ARM Chickens Come Home to Roost - CA Foreclosures Soar
LA Times article on the sharp increase in foreclosure notices:
Foreclosures also can weaken housing values further as lenders put the foreclosed homes on the market, often at reduced prices in hopes of a quick sale.
A firesale next door, that’s going to make the comps look awful.
Just Wednesday morning, Zhang dealt with a Lancaster resident who had taken out a $310,000 adjustable-rate mortgage with a starter interest rate of 5.4% and a monthly payment of $1,050.
In July, the interest rate climbed to 8.5% and the monthly payment jumped to $2,306. A year-end adjustment will send the monthly payment to $2,744.
“The borrower is totally unprepared for this rate adjustment,” Zhang said.
Read that again. The starting monthly payment was $1,050, by year end it will be $2,744!
The table says it all:
Share this article: del.icio.us | Digg it | Netscape | reddit | Yahoo MyWeb |
Posted: October 19th, 2006 under Americas, General, Real Estate, housing bubble.
Comments: none
Write a comment