Mayor Thomas M Menino, last Thursday, in response to the President’s subprime loan proposal:
“An astounding 80% of the City of Boston’s foreclosure prevention clients in adjustable rate mortgages never even made it to the first rate reset.”
These loans were bad from the beginning.
Bottom line: There seems to be no way to help these people keep their homes. Pointing fingers is a worthwhile endeavor, to an extent (who can we hold responsible).
But, it won’t solve the problem.
The loans were made to people who can’t afford to pay them back. Today or tomorrow. At current rates or at reset rates.
A good number of people have stopped paying now. I think this is because a lot of them see no reason to continue paying. They have 27-29 years of payments ahead of them, and almost all of their current monthly payments are going toward interest, so why continue to pay?