This is awesome (and truly awful) all at the same time.
We applied for (and got) a mortgage in California in 2005, and can attest to the mortgage broker’s modus operandi. The guy we worked with didn’t even present a “normal” 30-year fixed mortgage to us as an option — until we insisted upon it. Every loan he originally suggested had some crazy loophole. Most involved a gigantic balloon payment or interest-rate change a few years into the life of the loan, and he always said, “oh, you won’t ever have to really deal with that. You can refinance in a few years, when your home will surely have increased in value,” this being N. California, and all…. Of course, we needed a Jumbo loan, given that all of the crazy lending practices had allowed people to buy homes for much higher prices than they would have been able to, otherwise — allowing prices to climb.
The above PPT shows how our experience was typical, and just part of a vast, intricate web of craziness that got the economy where we are today.
– Via Continuous Beta