Homebuyers may not realize that monthly payments on some types of specialty mortgages can increase by as much as 50 percent or more when the introductory period ends.Its about time the people in leadership are warning homebuyers about the risks of these exotic loans. It is too little too late. It is not enough to warn people about these loans. These loans should NOT be issued to many of the people they are lent to.
“The growth of the specialty mortgage market has helped many borrowers finance the American dream of homeownership, but these mortgages come with risks,” says NAR President Al Mansell of Salt Lake City. “Consumers are susceptible to loans with monthly payments that can spike dramatically, or that actually increase the amount they owe on their home. Homebuyers should consult with a REALTOR® to learn about different financing options and their implications over time.”
Because homebuyers turn first to REALTORS® for advice on the real estate transaction, NAR is making the brochure available online to all of its 1 million-plus members at REALTOR.org. Buyers can ask their REALTORS® for a copy. The brochure also is available through the Center for Responsible Lending's Web site.
Sunday, August 21, 2005
NAR: Cautions Buyers on Specialty Loans
The National Association of Realtors warned homebuyers about 'specialty' loans or exotic loans. They warned:
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I wholeheartedly agree with NAR's warning concerning these jeopardous loans. Homebuyer's ardor and gullibility compounded with banks' duplicitous and esurient loan practices are harbingers of forthcoming economic times. There's only so much sanguine and optomistic behavior the public can exude to buttress this fairy tale economy. I wish my friend Andon Minob had considered NAR's alert. He would not have been taken for such a sore ride.
ReplyDeleteThis "warning" is totally unnecessary, after all, housing can only go up! Right?
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