ARMs Don't Kill Houses, Loan Hacks Kill Houses

By
Real Estate Mortgage Broker with San Diego VA Home Loans/858-777-9751

Adjustable rate mortgages, ARMs for short, are the most misunderstood, misused, and maligned financial instrument.  The have been abused by consumers, Realtors and loan originators alike these past 3-4 years and are now the subject of national scourge.  Much like our Second Constitutional Amendment critics, the ARM critics are usually misinformed and preying upon the fear of catastrophe. 

These inexperienced mortgage sales people or "loan hacks" as I like to call them, are banking upon your fear of catastrophe.  Loan hacks sold you ARMs in 2003 and negative amortization ARMs in 2005.  After they ride the fixed rate mortgage trend, they'll move on to reverse mortgages.  They lack original thought and critical analysis.  They'll sell you any loan that is on the front page of USA Today.

ARMs don't cause foreclosures, loan hacks cause foreclosures.

READ:   I am an American ARMs dealer.


Fixed rate mortgages, for the lion's share of the population, are an inappropriate recommendation.  Mortgage advertisers, unschooled in financial planning , are aggressively advertising fixed rate mortgages as a cure to the rising ARM rates.   They're encouraging you to sell low and buy high. 

SAY WHAT?   DID THEY FORGET THAT RATES GO DOWN, TOO?

You should lock in a fixed rate mortgage at the low end of an interest rate cycle, not the high end of it.  It is easier to sell fear than to properly counsel you so these loan hacks will try to baffle you with slick sounding "Myths".  

 

Three Myths Fixed Rate Loan Hacks Love to "Quote": 

READ THE REST ON AMERICA"S MORTGAGE BROKER
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Groups:
Carnival of Content - Loan Officers/Mortgage Lenders
Tags:
mortgage rates report
americas 1 mortgage rates report

Comments 52 New Comment

Ambassador
1,755,106
Jeff Dowler CRS
Carlsbad CA Homes for Sale (760) 840-1360
Solutions Real Estate

Excellent post, Brian. You are a master at this stuff! See you in SFO!

Jeff

July 31, 2007 12:46 AM
Rainmaker
120,426
Rebecca Savitski
NC Real Estate Listings
NC List for Less Realty Incorporated
My favorite answer when my buyers ask me my opinion of an arm is "it depends." No 2 borrowers are the same.
July 31, 2007 09:06 AM
Rainer
3,575
Robert Kerr
Kerr Financial

Does anyone actually think that this cherry-picked datum (which will no longer be true in 24-36 mos) is meaningful in some wider ARM v. fixed sense? If so, I'd like to hear the reasons why.

No, I think we'd like to hear the rationale for your prognostication about rates, Robert.
 

Hi Brian.

Mortgage Rates Decline but One Year ARM Rates Go Off the Chart 

I guess technically I was wrong; It only took 2 months, not 24.

 

September 10, 2007 08:08 AM
Rainmaker
298,656
Brian Brady
VA Home Loans/San Diego
San Diego VA Home Loans/858-777-9751

One step ahead of you, Robert.  Written in response to that article last week

It's temporary 

September 10, 2007 08:50 AM
Rainmaker
298,656
Brian Brady
VA Home Loans/San Diego
San Diego VA Home Loans/858-777-9751

One step ahead of you, Robert.  Written in response to that article last week

It's temporary 

September 10, 2007 08:51 AM
Rainmaker
298,656

Brian Brady

VA Home Loans/San Diego
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