Stupidity Watch 1

     I was a loan officer and then a document specialist before the collapse of the mortgage industry in 2008. I worked for a mortgage broker and direct lender called New West Funding. To become a loan officer I had to sit through 8 hours of ethics videos most of which were saying, "Even if you can, and it would make you more money, don't charge a higher interest rate."      I take ethics seriously, so I never wrote a loan for any adjustable rate mortgages or ARMs shorter than 7 years. Our company offered three and five year ARMs, but when I was asked about ARMs by customers I told everybody the same story. I said, "Half of all people in California stay in their homes for 7 years or less, if that's you, we can consider a seven or ten year adjustable rate mortgage, versus a 15 or 30-year fixed rate mortgage." Then I would run the numbers on the shorter adjustable rate mortgages and some hypotheticals for the interest rate rising, and ask if they could affo...

     I used to be a loan officer and a document specialist in the mortgage industry before the mortgage bubble burst and Countrywide went bankrupt. When President Biden was sworn into office January 20th 2021 mortgage rates for 30-year fixed loans were just under 3% and had been mostly under 4% percent since 2012. On a 30 year fixed loan of $240,000, 3% used to mean a payment of $1,012 a month for principal and interest, at 4% it would have been $1,146 a month. But with current rates averaging 7.5%, the same 30-year loan requires a payment of $1,672 a month, $660 a month more than at 3% and $526 more than at 4%.      In the first scenario 360 payments of $1,012 totals $364,320 minus the principal of $240,000 means you would have paid $124,320 in interest over the term of the loan. In the current scenario 360 payments of $1,672 totals to $601,920 minus the same $240,000 principal means you now have to pay $361,920 in interest over the term of the same 30...