Monday, August 27, 2007

The Mortgage Crisis & The Adjustable Rate Mortgage

At one time, the adjustable rate mortgage was credited with increasing the opportunity for individuals to become homeowners. But now, much of the current mortgage crisis stems from adjustable rates that have risen dramatically. Many homeowners claim that they were unaware of the fact that their loans were adjustable, or didn't understand what could happen when the fixed period expired. While lenders seem to continue to add documents and disclosures to their closing packages, some consumers complain that they were so overwhelmed by the amount of closing documents that they didn't clearly understand what they were signing. As signing agents, it is incumbent on us to make sure that the borrower clearly sees their important loan terms, including interest rate, monthly payment, prepayment penalties, and how and when their rate may become adjustable.

For more, see MSNBC's article on the ARMs Race.

1 comment:

Jim Lissemore said...

It is all in the note. It is a written contract. Any verbal statements by a LO are not worth the paper they are not written on.
Jim Lissemore
New Jersey Mobile Notaries