It’s Not Outsourcing, It’s the Banks Stupid

I have been reading a lot lately around the blogosphere that one of the reasons for so many foreclosures is that the U.S is outsourcing too many jobs abroad, which they say means people are losing their jobs and have to foreclose on their homes. Although this may be a very small percentage of foreclosure reasons, the #1 reason is the banks have taken advantage of many borrowers by offering them extremely low Interests rates in the form of ARMs. This has led to a 100% increase in foreclosers since Q3 of 2006.

These ARMs are now maturing and the monthly payments on some homes are increasing by as much as 20 - 30% of what they were paying before.

Unfortunately, many Americans do not save and when a 20% increase to their monthly payment occurs, they can no longer afford their payment.

Until mortgage laws tighten and banks stop giving out these ridiculous low interest ARMS, we will see more and more foreclosures. If you are looking to buy a home, please educate yourself on all loans and ask as many questions as you can.