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Health & Lifestyle
on Wed, 12/19/2007 - 2:03pm.
How many people are actually losing their primary home, and how many are "flippers" who were caught with their pants down when the housing market collapsed? ARMs have a purpose. They're specifically designed for the young professional, just starting out in life, who has a good chance at seeing his or her income substantially higher in the coming years. Too many "real estate moguls" (Ha!) started to view ARMs as cheap financing for the homes they bought, upgraded, and resold quickly. Every flipper wanted a cheap ARM, because the property would be sold and the loan paid off long before the rates went up. Unfortunately when the market collapsed the homes DIDN'T sell quickly, and now they're howling! But nowhere, nowhere can you find the exact ratio of how many families are truly losing their primary residence....and how many are simply investors seeing their dreams of quick wealth going up in smoke. My brother works in investment banking up in the Northeast, and he tells me that it's believed to be upwards of sixty percent! The media won't even look at the issue, because it would soon become a NON-issue if the facts came out. No one wants to see a family lose their home.....but no one feels a bit of sorrow for a guy who is simply taking a dent in his wallet because an investment didn't pan out. Bottom line: If you aren't going to see a marked increase in your income over the coming years and sign an ARM anyway, you're a total knucklehead. You're playing economic Russian roulette.
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