"I'm Praying for Another Boom" (Because Obviously I'm an Idiot)
This is why no American should be allowed to purchase a house, take out a line of credit, or be in the teaching profession without taking a rudimentary economics course. Don't come banging down my crappy apartment door looking for sympathy, you asshats, I'll laugh directly in both of your faces. And then kick you down my worn curvy staircase.
Next time why don't you figure out what in the hell it is you're getting yourself into before you sign, mmkay?
Edward and Maria Moller are worried about losing their house — not now, but in 2013.
That is when the suburban San Diego schoolteachers will see their mortgage payments jump, most likely beyond their ability to pay.
Like millions of buyers during the boom, the Mollers leveraged their way into a house they could not otherwise afford by taking out a loan that required them to make only interest payments at first, putting off payments on the principal for several years.
It was a “buy now, pay later” strategy on a grand scale, meant for a market where home prices went only up, and now the bill is starting to come due.
With many of these homes under water — worth less than the loans against them — many interest-only mortgages will soon become unaffordable, as the homeowners have to actually start paying principal. Monthly payments can jump by as much as 75 percent.
The Mollers owe so much more than their house is worth, and have so few options, that they are already anticipating doom.
“I’m praying for another boom,” said Mr. Moller, 34. “Otherwise, we’ll have to walk.”
Hey, WC Varones, these are your people! Here's to hoping you don't have kids in school with these two winners.
Perhaps Mr Moller can join Dr Bernanke for the weekly bubble prayer service?
Please let there be another bubble, please let there be another bubble..." Ok now don't forget to leave a burnt offering on the Fed's altar - might I recommend lamb? Tasty!
Oh, guess what? This might be a problem.
Still, interest-only loans represent an especially large problem. An analysis for The New York Times by the real estate information company First American CoreLogic shows there are 2.8 million active interest-only home loans worth a combined total of $908 billion.
The interest-only periods, which put off the principal payments for five, seven or 10 years, are now beginning to expire. In the next 12 months, $71 billion of interest-only loans will reset. The year after, another $100 billion will reset. After mid-2011, another $400 billion will reset.
John Karevoll, a longtime senior analyst for MDA DataQuick, sees the plight of interest-only owners this way: “You’re heading straight for a big wall and you can’t put the brakes on.”
No fucking way! Hope someone has a plan! (LOLZ)