Deadzoner
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http://articles.moneycentral.msn.com/Investing/ContrarianChronicles/FaceItTheHousingBustIsHere.aspx
Pronto, muy pronto. Rápido, muy rápido. Salvaje, muy salvaje.Missed in last week's 'Fed is done' euphoria was more stark evidence the housing bubble has burst. Growing numbers of homeowners can't make their payments.
When 'adjustable' becomes unsustainable
But the bigger picture is becoming increasingly harder to ignore. What we'll soon be seeing on a regular basis was portrayed by The Wall Street Journal last week, in a story titled "Homeowners Start to Feel the Pain of Rising Rates" (subscription required). The subtitle nicely summarizes the thrust of it: "Payments on Adjustable Loans Hit Overstretched Borrowers; 'Budgets Are Out of Whack.'"
It begins with the story of a Detroit accountant who was looking to lower her monthly payments. In 2004, she refinanced a $312,000 mortgage via an option-adjustable-rate mortgage that offered various payment choices, as do so many of these plans. Her (introductory) rate of 2.3% is now up to 8.75%, and her loan balance has grown to $324,000. She claims that the terms weren't clearly spelled out. But if she actually read the documentation, as accountants often do, and didn't get it, you can imagine how many people truly understand their mortgages. (Hint: The number rhymes with "hero.")