Monday, August 09, 2004

Does rise in adjustable-rate mortgages mean more foreclosures?

Industry disagrees on market impact
In Alexis McGee's view, the trend toward adjustable-rate mortgages will lead to one thingmore mortgages in default and more foreclosures.

That's because as interest rates inch up, so will the cost of those riskier loans, which varies over time unlike fixed-rate mortgages. Consumers are often attracted to ARMs because they can cut borrowers' monthly payments, allowing them to save that money for other purposes.

"My concern is that too many people are opting for them," said McGee, president of "And they're opting for them not to save money on the payments, but to get more house."
Read the entire article HERE

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