Monday, February 14, 2011 - 6:10 AM

Adjustable Rate Mortgages Are Back: Foolish Or Wise?

After accounting for nearly 70% of all mortgages issued during the boom, ARMs vanished during the bust, totaling just 3% of the market in 2009. Now they make up 5% of all mortgages issued, and Freddie Mac predicts 10% by December.

According to the article, ARMs can be a wise option for those who plan to live in the house for less than 7 or 8 years. Just hope those getting ARMs are prepared for the worst case.

KenBDG5,151 posts since
Nov 29, 2009
Rep Points: 117,108

1. Monday, February 14, 2011 - 9:03 AM

In a continuous boom and bust cycle, which our country is in, one will find a return of the same products involved in previous booms right before the bust. Financial institutions made tremendous amounts of money on ARMs, derivatives, CDOs, and an assortment of other financial products. These institutions, loosely regulated as before, are just going to do the same thing over and over again, without consequences, and make the bucks before the next collapse.

Shorebreak1,310 posts since
Apr 6, 2010
Rep Points: 4,935