The Second Wave of Monetary System Failure – Option ARMs and Alt-A loans
December 23rd, 2009 | by admin |
Option ARMs and Alt-A loans this will be worse than the sub prime mortgage crisis. Ordinary ARM loans, which are riskier than fixed-rate loans, apparently arent risky enough for many borrowers. The MBA says that their market share fell from 46% in the second half of 2004 to 36% in the first half of 2005. Why? Partly, it seems, because more people chose option ARMs. Those, of course, are specialty ARMs that give you the option to pay even less than the monthly interest you owe. The unpaid interest gets added onto your principal (negative amortization). Option ARMs climbed from 17% to 23% of first-mortgage originations.
Then there are alt-A loans—the ones you get when you dont submit all the documentation that would be required to qualify for a straight loan. Those are usually chosen by people who have unsteady sources of income—or simply have too little documented income to qualify for a straight loan for the house they want to buy. The MBA says alt-A loans share rose from 8% to 11%.
The average person lives in their home for only 6 years according to the National Association of Realtors. During that time a person only pays less than 8% to the principal and a whopping amount to interest. Of course the Mortgage Bankers Association does like this loan; they want EVERYONE paying the largest amount of compounded interest money to the bank instead of putting it into a personal retirement account earning compounded interest.
When a person applies the monthly savings to a personal retirement account earning compounded interest, over the years, this will yield them hundreds of thousands of dollars when the program is managed by professionals.
A penny doubled every day for 30 days is $1,000,000. We all heard that when we were children. Well banks use that ‘formula’ to get wealthy.
Duration : 0:5:28
25 Responses to “The Second Wave of Monetary System Failure – Option ARMs and Alt-A loans”
By 62636263c on Dec 23, 2009 | Reply
Families must come …
Families must come back together to be strong enough to survive what might be on the horizon. They should be doing that anyway.
By FreeThought911 on Dec 23, 2009 | Reply
Damn dude.
dude.
By acmedressform on Dec 23, 2009 | Reply
LIVE WITHIN YOUR …
LIVE WITHIN YOUR MEANS! If you want to get rich set up a factory, go into agriculture, don’t speculate! Invest in real people and the real economy
By acmedressform on Dec 23, 2009 | Reply
I see a budding war …
I see a budding war profiteer, sigh
By acmedressform on Dec 23, 2009 | Reply
good one!!
good one!!
By acmedressform on Dec 23, 2009 | Reply
you will when there …
you will when there are riots and potential wars from extreme systemic imbalances, although judging from your username you might be into that sort of thing.
By remrafgod on Dec 23, 2009 | Reply
You will, when you …
You will, when you lose your ditch digging job!
By vanhellcine888 on Dec 23, 2009 | Reply
who gives a fuc-k
who gives a fuc-k
By TABOOVSKNOWLEDGE on Dec 23, 2009 | Reply
I was just joken
I …
I was just joken
I know!
By 90210bt on Dec 23, 2009 | Reply
This is more than …
This is more than just an american problem.
By 90210bt on Dec 23, 2009 | Reply
So, what are you …
So, what are you going to do with your gun?
By 90210bt on Dec 23, 2009 | Reply
Kill Wall street – …
Kill Wall street – this is your answer? Borg….wtf?
By Sleeko11 on Dec 23, 2009 | Reply
Let’s not blame …
Let’s not blame this on “America”. This is a contrivance of Wall Street. Just because Wall Street is physically located in the USA, does not mean it represents the American people. Wall Street is like the Borg of star Trek. A mindless, amoral beast, that needs to be killed.
By Sleeko11 on Dec 23, 2009 | Reply
The business to be …
The business to be in,…. is the gun business.
By TABOOVSKNOWLEDGE on Dec 23, 2009 | Reply
Death To America!!!
Death To America!!!
By Entropy137 on Dec 23, 2009 | Reply
I think he’s …
I think he’s exaggerating. In the last decade, oil was big business, but did the workers of the oil companies make the big bucks? No, it was the owners of the companies. So if farmer does as well as he says, the owners of farm corporations will do well, but the farm workers won’t(except for the agriculture engineers of course).
By rndllhllw on Dec 23, 2009 | Reply
Nice work. keep it …
Nice work. keep it up. mean time come for social media marketing for esteembpo**com
By MysticGohanBuu on Dec 23, 2009 | Reply
1.Cover your mouth …
1.Cover your mouth with your hand.
2. make a wish into it.
3. close your hand(make it into a fist)
4. hold your hand(the fist) to your heart for five seconds
5.send this to 3 more videos
6. Tommorw will be the best day of your life
By redcommand85 on Dec 23, 2009 | Reply
just like jim …
just like jim rogers says. the famers and miners will be the next millionaires and the banking elite will be bankrupt.
By dieselfiend on Dec 23, 2009 | Reply
Other countries are …
Other countries are probably going to be worse than us and eventually China is going to cash in what’s left of the trillion plus dollars they lent us before it’s not even worth the paper its printed on and this will lead to the crash of the dollar. 1000 dollars for a bag of wheat!?!?!?!?!? We should let all these greedy bastards go bankrupt and reorganize.
By dcm05002 on Dec 23, 2009 | Reply
the stock market …
the stock market will lose 90% of its value. Then inflation will hit after confidence is lost in the bond market. This is inevitable. I’d be looking for another country to move to right about now.
By sep0507 on Dec 23, 2009 | Reply
What if your …
What if your landlord defaults on your rental? Renters are not necessarily free from the mortgage crisis. They may still be impacted depending on their landlords behavior.
By beecritical on Dec 23, 2009 | Reply
damn this is an …
this is an important vid
By Hendo1974 on Dec 23, 2009 | Reply
America is fucked! …
America is fucked! Huge violence coming! People will just go mad!The is going to hit the financial fan!
By ExileElf on Dec 23, 2009 | Reply
This is fucked. …
This is fucked. THis is looking really scary for a good decade.