ARM Horror Stories

This is just weird. Yesterday morning I commented on a USATODAY.com Article about one in 5 ARM (adjustable rate) loans being in default.

I then talked with three homeowners who are in this trap - all in one day!

1) A Portage family whose payments have gone up every 6 months for the last two years. When the guy got laid off for 3 weeks, it was enough to put them behind and never be able to get caught up.

2) The next couple is from Lawrence. Not only were they caught in this ARM trap, but they also fell for the "mortgage broker promise of refinance" trap. You may have experienced this too - it goes like this: "Don't worry, we'll get you refinance before the foreclosure". Yeah, right! The simple fact is, they want their application fee and know that unless you've got a TON of equity in your house, there's no way they will get you financed with 2+ late payments on your credit. Unfortunately, they waited until 2 days before the foreclosure before calling me so there was nothing I could do.

3) This morning (after I take the doggies to the vet), I'm heading to the west side of Kalamazoo to help a couple who has their house listed with a Realtor. They are listed at about $20K more than the house is worth because they had no choice. Not only do they have an out-of-control ARM on their mortgage, but they also have a 2nd mortgage and they owe significantly more than the house is worth. Actually, it's a condo - we do condo's too.

I've got several deals "in progress" with lenders working on discounts that should pop soon - looking forward to passing along that good news when it happens!

See ya tomorrow!

Joel