During the last real estate boom many lenders were offering refinancing mortgage adjustable interest rate mortgages to borrowers who normally could not qualify for a home loan.
How The Subprime Adjustable Rate Mortgage Hurt Home Owners
The main drawback with this types of adjustable interest rate mortgage is most of them were written as very short term ARMS.In fact many of these loans reset after just two years.
This was not a problem when the refinancing mortgage boom was going full swing and house values were increasing and lenders were getting very aggressive with their loan programs and really relaxed on who they approved for a loan. Once the housing market started to cool many of these borrowers who bought their homes with a subprime adjustable rate mortgage were unable to refinance.
This was do to a variety of reasons but for the most part as the banks and lenders went out of business they took the subprime programs with them. This basically left the borrowers that once depended on these loans without a place to go to refinance their adjustable interest rate mortgage.
Then to make matter worse property values around the country began to sharply decrease. This left many home owners owing more on their mortgage then the home they lived in was now worth.
As a result of these circumstances foreclosures started to dramatically rise because people were struggling to pay the house payments after their fixed rate expired and the payments on their subprime adjustable rate mortgage increased by hundreds of dollars a month and unable to refinance.
If you are struggling with an Adjustable Rate Mortgage and feel like you have no where to turn, then visit http://www.adjustablemortgageinfo.com and get information on how to save your home from a Subprime Mortgage gone bad.
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