Political Quotes

“What happens under ARMs is that there is a teaser rate, which is very low. You lure people in with the teaser rate--and I am now talking about people who should not be in ARMs. Then, after the teaser period ends, the rate rises to the much higher fully indexed rate. What happens, of course, at a teaser rate, many people may be more than capable of meeting that obligation. Many mortgage brokers are marketing these products without being honest and forthright about what the fully indexed rate will be, and what the borrower's financial responsibility will be. It is also important to state that borrowers have a responsibility as well as lenders. But in too many cases, those borrowers were being lured into situations that the brokers fully well knew that the borrowers were never going to be able to meet. This problem will last far beyond 2008. As this chart shows, even after the current subprime wave washes over us, we will face serious problems with interest-only and option-ARM resets for the next 4 years.”