USA: The long ARM of the mortgage industry
Source: USA Today
Letitia Youngblood struggled through repairs, government paperwork and shady contractors to rebuild her home after Hurricane Katrina. Then her mortgage payments recently jumped 35%.
Now Youngblood, behind on payments and out of rebuilding money, said she may lose her Lower 9th Ward home. The floods couldn't keep her from her house, but higher payments might.
"It's too much," Youngblood, 53, said. "My mortgage was the last thing I was thinking about."
So people work their whole lives to pay for a house, have to disperse to places around the country when Katrina hits and the levees break, come back to rebuild, and then the thing that breaks them is the adjustable rate mortgage from their local lenders. Banks take their homes in foreclosure. Anyone who thinks this is the homeowners' fault for buying something they can't afford needs to tell me in plain language what the hell 0% APR means. The financial industry sends up a cloud of obfuscation through jargon and hucksterism, then makes it our fault when things go sour.
My wife and I had a 5-year ARM for awhile. The monthly statements were so obtuse it was impossible to figure out what we'd be paying when the five years ran out, even though it coincided with record low interest rates across the US. Calls to the bank resulted in the run-around. No straight answers to simple questions. So we refi-ed into a 30-year loan. We had options. But for people in the Gulf Coast rebuilding their homes, no such options. What the hell is wrong with this country?
