Obama to Set Goal of Reducing Oil Imports by One-Third in Decade (but won't allow new drilling)

ny times ^ | 3/30/2011 | By JOHN M. BRODER

[aces]

I understand, but to cripple them we must take another route..

[shove_it]

Most adjustable rate mortgages are based on the one year LIBOR which has come down since mid 2006 from a relatively low historical rate in the 6% range.

[thackney]

Yes but in 2007~2008 many people had chosen a mortgage that had an introductory rate for a few months, some half a year.

They got in over their heads from the very beginning. The con was prices were rising so fast they planned to refinance after the value climbed above 80% of the mortgage. For many it crashed before then.

[shove_it]

In #50 you said adjustable rates were climbing when in fact they were falling. I know this because I have an ARM which is now adjusting year to year. My rate has come down from 8% in 1999 to a current rate of 3.25% and I expect it to come down again in June when it due for another adjustment. It’s one of those little beauties from Countrywide.

[thackney]

I was trying to refer to the introductory rate mortgages that automatically climbed after the initial period. I didn't describe it well.

[unseen1]

And what caused the people to stop paying on their loans? the loans were risky because the monthly payments were based on a perfect world. As soon as gas prices went up, those that had been able to just pay were no longer able to pay.

[unseen1]

Again. The people were just able to pay those mortgages until gas prices rose, causing all other prices to rise which made those living paycheck to paycheck no longer able to pay that mortgage.

sure you had some unable to pay from the beginning but it was not until the gas prices hit $4.00/gal that you had massive defaults which tanked the market which caused companies to lay off everyone.

[thackney]

You and I will have to disagree that gasoline prices was the only triggering factor of the economic collapse.

I certainly agree it was a contributing factor, just not the only one.

Cheers

[KittenClaws]

And what caused the people to stop paying on their loans? the loans were risky because the monthly payments were based on a perfect world. As soon as gas prices went up, those that had been able to just pay were no longer able to pay.

Monthly mortgage payments should never be based on a "perfect world" scenario.

Government mandate forced lenders to allow hundred thousand dollar (+) home loans on thousand dollar a month incomes. Therefore, the problem is federal interference in the free market no matter how you slice it.

IMO, if a rise in gasoline costs even by twenty dollars a tank, causes a home loan default, then it is time to quit drinking champagne on a beer budget - don't enter into contracts you can't afford.

[unseen1]

agreed....and I said as much in my earlier post that the economy was based on a shaky foundation.

But if a flood comes and knocks down the shoddy built houses we blame the flood not the shoddy houses.

$4/gal gas was the flood. subprime was the shoddy built houses.

[KittenClaws]

agreed....and I said as much in my earlier post that the economy was based on a shaky foundation. But if a flood comes and knocks down the shoddy built houses we blame the flood not the shoddy houses.

$4/gal gas was the flood. subprime was the shoddy built houses.

I believe we are having a tomAto-tomAHto moment.

[unseen1]

yes it seems we are. I guess my point is that the economy is still built on the shoddy foundation and when the flood comes the results will be the same....

[KittenClaws]

yes it seems we are. I guess my point is that the economy is still built on the shoddy foundation and when the flood comes the results will be the same....

We may disagree about the details, but not the results.

I was enjoying our exchange, unseen1. Thanks for a good conversation. I hope we can do it again sometime!