Mortgages

Email this page to a friend

Want news about Mortgages and more e-mailed to you? Click here for free email alerts

Financial Armageddon: Protecting Your Future from Four Impending Catastrophes Michael J. Panzner See book keywords and concepts

But with adjustable-rate mortgages and the like accounting for a significantly larger share of a market that comprises 45 percent of total nonfinancial debt, borrowers—individual Americans—will increasingly feel the heat. It is not just the mortgage market that has been affected. According to Bankrate.com, by early 2006, approximately two-thirds of all credit cards carried variable interest rates, a noticeable increase from the 55 percent level only 12 months earlier.

Many of these "subprime" borrowers discovered that by taking on adjustable-rate mortgages, or ARMs, which featured ultralow introductory rates instead of the traditional 30-year, fixed-rate loans, they could tap into the American dream and own their own home. Some had to stretch even harder than that, but bankers were only too willing to oblige.

Typically, the lower-rated tranches would be structured in such a way that they would be the first to suffer losses if some of the homeowners whose loans were in the "pool" defaulted on their mortgages. By tradition, the riskiest slice is called the "equity tranche." The yield for each tranche would vary, with the overall average working out to less than what the underlying mortgagees were paying. The difference would go to cover the fees of those involved in the securitization and later sale to investors, as well as any legal and administrative costs.

Warning signs of the housing bubble crash (part two) Mike Adams, the Health Ranger See article keywords and concepts

A recipe for disaster: variable rate mortgages Here's how it works: You've heard of the variable rate mortgages, where you have a low interest rate today, but that rate is tied to the prime rate. If the Fed raises the interest rate, mortgage payments go up. There's really no limit to how high it can go. In the late 1970s, interest rates were 18 percent, and today people are complaining about how much interest they're paying on a house at 6.5 percent. Wait until it's 18 percent. If it gets that high, your monthly payment will essentially triple.

Financial Armageddon: Protecting Your Future from Four Impending Catastrophes Michael J. Panzner See book keywords and concepts

Fannie and Freddie became master securitizers, buying up tremendous numbers of mortgages from a wide range of loan "originators"— banks, thrifts, and specialized mortgage finance companies—and repackaging them into mortgage-backed (MBSs)securities with a guarantee slapped on for good measure. Then they sold these MBSs to large and small fixed-income investors, state and local governments, foreign central banks, and a wide range of other banks and financial services firms.

The Long Emergency: Surviving the End of Oil, Climate Change, and Other Converging Catastrophes of the Twenty-First Century James Howard Kunstler See book keywords and concepts

Under such inflationary conditions creditors would be repaid in dollars worth less than the dollars lent out, so loans and mortgages carried inflated premiums. Such extremely high interest rates on business loans made it difficult for companies to rationally allocate resources for capital expenditure. High interest rates discouraged house buying because the mortgage interest was gargantuan. The industrial nations entered deep recessions, the worst since the 1930s. The so-called developing nations were especially hard-hit.

Financial Armageddon: Protecting Your Future from Four Impending Catastrophes Michael J. Panzner See book keywords and concepts

Borrowing money was fast becoming the bad habit of choice for American consumers, many of whom were finding it hard to "just say no" or were oblivious to the longer-term consequences of boosting debt exposure to hitherto unseen levels. Households spent a record 13.75 percent of their after-tax income on servicing required interest and principal payments during the last quarter of 2005. Americans borrowed so carelessly because they focused only on the payments involved. When it came to obtaining financing, the number that always stood out was the monthly carrying charge, or "nut.

Bank for International Settlements. Of course, the assumption is that most homeowners whose loans are in a pool will actually make their payments on time—and will eventually repay all of the original principal. This belief will prove fanciful in the wake of a bursting property bubble and an economy that abruptly flips from modest growth to sharp contraction. All of a sudden, large numbers of believers in the American dream will find themselves out of ajob, owing more on their homes than their properties are worth, or both.

The Long Emergency: Surviving the End of Oil, Climate Change, and Other Converging Catastrophes of the Twenty-First Century James Howard Kunstler See book keywords and concepts

Bankers made loan decisions based on firsthand knowledge of projects going on in their communities—not, as today, based on bundling and selling clumps of mortgages for generic suburban developments they have never laid eyes on. The baby boom generation, the offspring of those who fought in World War II, grew up in this period of extraordinary financial stability and economic promise, and it became their lifelong benchmark for normality.

Nothing else really mattered except building suburban houses, trading away the mortgages, selling the multiple cars needed by the inhabitants, upgrading the roads into commercial strip highways with all the necessary shopping infrastructure, and moving vast supplies of merchandise made in China for next to nothing to fill up those houses.

Loans became ever more abstract "units" of generic "product," such as commercial mortgages, traded in bundles and clumps like scrap metal. As local business and local ownership became irrelevant, so did local banking and local lending for local ventures. The hypercommoditizing of lending disconnected bankers from knowledge of the ventures they lent money for—just so many strip malls or condominiums—which also tended to reinforce the generic predictability of suburban development all over the country.

Stocks, mortgages, interest differentials, weather. In short, it was a way of turning all risk, as defined in investment terms, into a casinolike panoply of betting options in a new global investment casino. During the formative years of the computer revolution, some players assumed that they had super-slick formulas or equations for beating the odds. They also employed strategies for "hedging" their bets so that one potential losing position would be covered by a winning position somewhere else. When extremely large figures were bet, even tiny value spreads could yield fantastic profits.

From 1999 to 2004 roughly a third of all house owners indulged in cash-out re-fi mortgages. The racket seemed without hazard when housing values only went up, up, up. Behind every extravagant cash extraction lay the belief that at some future date the house would be worth a lot more than the re-fi price and could be readily flipped. In super-hot markets such as the Boston suburbs or Long Island or Marin County, properties rarely stayed on the market for more than a few days. Often bidding wars broke out between hysterical buyers, going beyond the asking price.

Worldchanging: A User's Guide for the 21st Century Alex Steffen See book keywords and concepts

Micro Finance mmmm Many of us enjoy middle- or upper-class status not because of the size of our paychecks, but because of things like interest-bearing savings and fixed-deposit accounts, credit cards, mortgages, insurance, mutual funds, and other investment services, which grant us additional financial leverage. If such a complicated mix of financial systems didn't exist, what economic class would each of us really fall into? Would we ever get that leaky roof fixed or be able to turn a hobby into a thriving online business? These days, financial services are critical for creating wealth.

Ultraprevention : The 6-Week Plan That Will Make You Healthy for Life Mark Hyman, M.D. See book keywords and concepts

So in addition to putting in more than seventy hours a week of work, I had to worry about two mortgages and a rental. One early morning, while working an emergency room shift, I spotted blood in my urine. I shuddered: Maybe a kidney stone, I thought, or an infection. But there was no time to check—I was too busy taking care of my patients' health. I finished that shift, went home and slept, and worked almost continuously for the next couple of days, and my urine cleared up, so I assumed the problem was improving; perhaps a cyst had ruptured.

Outsmart Your Cancer: Alternative Non-Toxic Treatments That Work Tanya Harter Pierce See book keywords and concepts

He said, "Root canals are like mortgages. As long as you can make enough money to pay the payment every month, everything is fine. But once you can't make the payment, then you're in big trouble!"10 In other words, it is the strength of the immune system and the body in general that determines whether or not a root canal-filled tooth is going to bring about obvious health problems in any individual. This could be applied to the effects of mercury amalgam fillings and nickel-alloyed crowns as well.

Radical Healing: Integrating the World's Great Therapeutic Traditions to Create a New Transformative Medicine Rudolph M. Ballentine, M.D. See book keywords and concepts

He was not, however, thinking of the farmer who drives heavy equipment, spreads toxic chemicals, and wrestles with profit margins and mortgages. What he had in mind was the tiller of a small piece of land who lived in close communion with the forces of nature and coordinated his bodily toil with the phases of the moon and the shifting of the seasons: "He knows the state of his immediate surroundings thoroughly well, he can find the directions by looking at the stars in the night.

The New Dictionary of Cultural Literacy: What Every American Needs to Know James Trefil, Joseph F. Kett, and E. D. Hirsch See book keywords and concepts

In real estate, the financial value of someone's property over and above the amount the person owes on mortgages. For example, if you buy a house for $100,000, paying $20,000 down and borrowing $80,000, your equity in the house is $20,000. As you pay off the principal of the loan, your equity will rise. escrow (es-kroh) The condition of being ineffective until certain conditions are met. For example, money inherited by a minor might be held in escrow until the heir reaches a certain age.

Homeowners with mortgages frequently pay money for insurance and taxes on their home into an escrow account each month. The holder of the mortgage then pays the insurance and tax bills out of the escrow account when the bills are due. eviction Legally turning a tenant out of rental property for not paying rent or not satisfying some other obligation. Foreign Exchange Rates: 1970 to 1991 This chart shows the rate of exchange for various national currencies in U.S. dollars as of December 31 of each year shown. Rates are rounded off to the nearest penny.

Age Erasers for Men: Hundreds of Fast and Easy Ways to Beat the Years Doug Dollemore, Mark Giuliucci and the Editors of Men's Health Magazine See book keywords and concepts

There's job stress and mortgages and mothers-in-law and prostates. And when are the Cubbies ever going to win another pennant? Can't we get serious about prevention when stroke really becomes an issue? Sorry. It's already an issue. Despite its reputation as an older man's problem, stroke hits more than 15,000 American men between the ages of 30 and 44 every year. Nearly one in every three strokes is fatal. And the aging effects on those who survive can be brutal. Survivors could suffer brain damage affecting speech, memory, thought patterns and behavior.

How to Get Out of the Hospital Alive: A Guide to Patient Power Sheldon P. Blau, M.D., F.A.C.P., F.A.C.R. and Elaine Fantle Shimberg See book keywords and concepts

What I signed could have included my paying off the physicians' mortgages and giving them my firstborn son for all I knew. If a blockage was severe, an angioplasty would immediately follow. They gave me more Valium to reduce my anxiety. It's hard not to be anxious when you know what's happening to you and what could go wrong. Complications of these procedures included infection, bleeding, and rupture of the coronary artery. What I feared could go wrong did. A technician jabbed a bore needle into the femoral artery in my groin. It's a large needle.

The Origin Diet: How Eating Like Our Stone Age Ancestors Will Maximize Your Health Elizabeth Somer, M.A., R.D. See book keywords and concepts

An endless stream of daily duties—from deadlines, traffic jams, arguments with a spouse or boss, and due dates to time pressures, mortgages, sick children, and to-do lists—causes us stress, which then lingers day in and day out, month after month. Our bodies never evolved mechanisms to handle this type of chronic stress. Consequently, normal arousal escalates into anxiety, vigilance causes insomnia, elevated heart rate and blood pressure lead to heart disease, and prolonged focused attention burns out brain cells, resulting in memory loss and learning problems.

Biomarkers William Evans, Ph.D., and Irwin H. Rosenberg, M.D., with Jacqueline Thompson See book keywords and concepts

Few have spouses or children or mortgages to worry about—at least not yet. But as they move into their 30s and 40s, their priorities tend to shift and their lives change. Making a good living becomes more pressing than winning next week's race. Even if these more mature athletes continue to compete, their lives have probably changed to the point where full-time training, 15 to 20 hours per week, is no longer possible. Sure, middle-aged athletes don't excel in competition to the extent they did when they were younger—but most aren't training like they did back then, either.

The Dictionary of Cultural Literacy E. D. Hirsch See book keywords and concepts

In real estate, the financial value of someone's property over and above the amount the person owes on mortgages. For example, if you buy a house for $100,000, paying $20,000 down and borrowing $80,000, your equity in the house is $20,000. As you pay off the principal of the loan, your equity will rise. escrow The condition of being ineffective until certain conditions are met. For example, money inherited by a minor might be held in escrow until the heir reaches a certain age.

Homeowners with mortgages frequently pay money for insurance and taxes on their home into an escrow account each month. The holder of the mortgage then pays the insurance and tax bills out of the escrow account when the bills are due. eviction Legally turning a tenant out of rental property for not paying rent or not satisfying some other obligation. exchange rate The price at which one currency can be purchased with another currency or gold.

The Okinawa Program : How the World's Longest-Lived People Achieve Everlasting Health Bradley J. Willcox, D. Craig Willcox, and Makoto Suzuki See book keywords and concepts

Professor Sapolsky points out that it is hardly a general mammalian trait to become anxious about mortgages, the Internal Revenue Service, public speaking, job interviews, or the inevitability of death. In other words, human beings get stressed about things that wouldn't make sense to wild animals (like zebras), and more important, don't make sense to the physiological systems of our bodies, which have evolved similarly to respond to the physical threats of life in the wild.

The New Dictionary of Cultural Literacy: What Every American Needs to Know James Trefil, Joseph F. Kett, and E. D. Hirsch See book keywords and concepts

Commonly used to purchase homes, mortgages specify the terms by which the purchaser borrows from the lender (usually a bank or a savings and loan association), using his title to the house as security for the unpaid balance of the loan. multinational corporation A corporation with operations in two or more countries. fa The rise of multinationals, a relatively recent occurrence, has resulted in a great deal of legal ambiguity because they can operate in so many jurisdictions.

FAIR USE NOTICE: The research quoted here is provided under the protection of Fair Use provisions and published by the 501(c)3 non-profit Consumer Wellness Center for the purposes of public comment and education. Authors / publishers may submit books for consideration of inclusion here.

TERMS OF USE: Read full terms of use. Citations of text from NaturalPedia must include: 1) Full credit to the original author and book title. 2) Secondary credit to the Natural News Naturalpedia as a research resource and a link to www.NaturalNews.com/np/index.html

This unique compilation of research is copyright (c) 2008 by the non-profit Consumer Wellness Center.

ABOUT THE CREATOR OF NATURALPEDIA: Mike Adams, the creator of this NaturalNews Naturalpedia, is the editor of NaturalNews.com, the internet's top natural health news site, creator of the Honest Food Guide (www.HonestFoodGuide.org), a free downloadable consumer food guide based on natural health principles, author of Grocery Warning, The 7 Laws of Nutrition, Natural Health Solutions, and many other books available at www.TruthPublishing.com, creator of the earth-friendly EcoLEDs company (www.EcoLEDs.com) that manufactures energy-efficient LED lighting products, founder of Arial Software (www.ArialSoftware.com), a permission e-mail technology company, creator of the CounterThink Cartoon series (www.NaturalNews.com/index-cartoons.html) and author of over 1,500 articles, interviews, special reports and reference guides available at www.NaturalNews.com. Adams' personal philosophy and health statistics are available at www.HealthRanger.org.