What your banker won't tell you...
This summer could be a foul season for many consumers followed by tumultuous times for the remaining years. The quadruple jinx of rising interest rates, higher credit card minimum payments, erratic fuel costs, and depressed home values could be the calamity for many families already living on the threshold of bankruptcy.
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Americans who recently broke into overvalued home equity, at historically low interest rates, are now seeing a sign of things to come. In some cases, consumers may find themselves upside down, owing more than their home is worth. In other cases, low interest rate credit cards now mandate Aprs at least four percentage points higher than two years ago. Plus, issuers have been forced by regulators to duplicate minimum payments on some cardholders who are paying high interest rates. But the real blistering is fuel prices which could now soar any day to any price. Paying per gallon for gas, higher utilities, a 30%+ Apr for credit cards, and clinging to a 100%+ home equity line of credit may push more Americans into foreclosure and ultimately bankruptcy.
Don't kid yourself on your current home situation. If you are upside down in your home, there is a clause in your ageement with the lending custom that states that they can 'call' the loan in at anytime. That means quite plainly that they can force you to pay sufficient to conclude yourself into an equity position or foreclose on the home. Why would the banks do that?
Look at it this way. Banks are in the enterprise to make money, it's as easy as that. In addition, while you are mailing off your mortgage cost to Chase Manhattan, it may truly be forwarded to The Bank Of Beijing! That's correct. China now holds over 40% of American home mortgages.
There is a concrete presume that credit card minimums have doubled. The credit card industry will attempt to fill your head with propaganda such as: 'they are attempting to help consumers get out of debt quicker'. What they are truly pulling off is this: when you can't make the minimum cost and caress them, they are now trained to look at your credit file and conclude how much (if any) equity you might have in your home. They then offer you a consolidation loan with their bank. Should you conclude to take them up on their generous offer of a consolidation loan, they then own you. Should you default on your credit card, they can take the house! Beware of wolfs in sheeps clothing.
Another clandestine offer is buyer credit counseling. Every ad and industrial you will see for this assistance pitches themselves as a non-profit assosication that was established plainly to help you get out of debt quicker, thus avoiding bankruptcy. What you don't know is that the non-profit buyer credit counseling industry if fueled and funded by the credit card industry. They description to the credit card industry! They also will not make your monthly payments on time, thus ruining your credit history anyway. I have seen this time and time again, over and over.
This brings me to Arm's. In short, they are adjustable rate mortgages. Never in American history have we seen so many population with no credit files beloved for home loans. Many of these population were innocently following the American dream and quite naturally, the American dream is to buy as much house as you can afford for the longest number of time. Based on this fact, many population that could not afford that dream house under accepted financing were able to afford it by incorporating an Arm loan.
In the long run, this will come back to bite them hard. When they signed an Arm, they were betting that the interest rates would not rise while the next 30 years! When the rate does rise and their mortgage rises accordingly, we will start seeing the effects of this in the way of mass foreclosures. As of this writing, we are already at an all-time high for foreclosures beginning with Indianapolis in first place, Atlanta in second place and Dallas-Ft. Worth in third place. As rates continue to rise and jobs continue to be outsourced, we will see a plague of foreclosures that I predict will surpass the 1980's.
The Shocking Truth About Your Mortgage!
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