The wheeler-dealers in the banking world cooked up this mess, but never saw the end result or its impact until too late. The Adjustable Rate Morgages (ARMs) that bankers sold countless home buyers on seems to be the root of all the evil that has befallen our country. Also, the fact that these same bankers gave home loans to people who did not have the income to pay their home payments in the first place and then were really unable to pay their home mortgage payments once these ARMs bumped up the interest rate on that same mortgage within two years’ time.
Congress and ol’ George W. are wringing their hands over what to do about this situation. I’m surprised that they haven’t already thought of this solution and that is to have an investigation into who allowed this mess to be promoted in the first place and then work to straighten it out, or, better yet, make the banks and mortgage holders work it out. I do believe there is a solution that would work to the betterment of all parties concerned and it would stop the foreclosure rate and might possibly rejuvenate the home building market in the long run as well.
When the ARMs ratchet upwards, the resulting increase in revenues that the banks and mortgage holders realize is like found money. If they were to remain at the original rate of interest, many of the foreclosures that are resulting would be avoided because people would probably still be able to make their mortgage payments as before.
In any event, this whole mess is like someone stealing candy from a child. Homebuyers are not versed, as a general rule, in all the nuances of the homebuying and moneymaking market place. They go to work, pay their bills and try, as to the best of their ability, to live the American Dream, whatever that is. When they work with a banker, they expect to be treated fairly and they trust the bankers and mortgage lenders to do the best for them in their quest for that dream house or castle, as the case may be.
On paper, this ARM mess looks like a war zone of sorts. As you drive up and down neighborhoods you can see very vividly the results of this economic Armageddon with all the home-for-sale signs in the front yards. Many of these signs are also a sort of tombstone to the fact that the owner has lost this economic nuclear war and has become its casualty and the for-sale sign is his personal marker to attest to his lost dreams.
Larry Wilson is a 50-year resident of Sparks and a retired elementary school teacher. You can contact him at firstname.lastname@example.org.