For Many, 'The End of The American Dream'

Interest-only loans and ARMs once touted as a panacea have now become the vehicle for massive foreclosures as financially distressed owners can no longer afford their expensive homes.

1 minute read

January 31, 2007, 6:00 AM PST

By Nate Berg


For the past several years, mortgage brokers and lenders have provided an ever increasing array of innovative ways for individuals to become homeowners. These methods, based on the initial premise that home prices would continue to appreciate afforded many individuals the means to purchase more home than they could truly afford. Once substantially appreciated, the homeowner would be able to capitalize on the increased valuation of their homes in a market that had such strength, the thought of its changing was thought of as remote. However, "What happens when the prices stabilize, decrease or mortgage rates begin to increase?" For many Californians, the dream of home ownership is now becoming a nightmare as it becomes time to pay the piper.

Americans in droves are beginning to lose their homes as they can no longer afford to pay on the instruments that years ago provided them with the comfort of homeownership. How did this happen? Was it based on ignorance, greed or just plain manipulation of the system by those that through a wink and a handshake transfered the keys to a castle and now awaits on the courthouse steps for a bargain?

Thanks to Fernando M. Coriano

Sunday, January 28, 2007 in The Sacramento Bee

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