The Shocking Truth About Your Mortgage!

What Your Banker Won’t Tell You

This summer could be particularly challenging for many consumers, leading to years of financial instability. Rising interest rates, higher credit card minimum payments, fluctuating fuel costs, and depressed home values may push many families to the brink of bankruptcy.

The Quadruple Jinx:

1. Rising Interest Rates:

- Many Americans took advantage of historically low interest rates to access home equity. Now, with interest rates rising, they may find themselves owing more than their homes are worth.

2. Higher Credit Card Minimum Payments:

- Credit card companies have increased APRs by at least four percentage points from two years ago.

- Regulators have forced issuers to double minimum payments for some high-interest cardholders.

3. Erratic Fuel Costs:

- Fuel prices could surge unpredictably, impacting household budgets severely.

4. Depressed Home Values:

- Home values have dropped in some areas, leaving homeowners with less equity and potentially upside down in their mortgages.

Potential Consequences:

- Increased Foreclosures:

- With rising expenses and decreased home values, more Americans may face foreclosure.

- Bankruptcy Risks:

- A combination of higher living costs and debt may push families into bankruptcy.

Understanding Mortgage Contracts:

If you find yourself upside down in your home (owing more than it's worth), be aware of the clause in your mortgage contract that allows the lender to ‘call’ the loan. This means the lender can demand you to pay enough to achieve a positive equity position or face foreclosure.

Why Would Banks Do This?

Banks are in the business of making money. Interestingly, a significant portion of American home mortgages is now held by foreign entities, including over 40% by China.

Credit Card Minimum Payments:

The credit card industry has doubled minimum payments, not necessarily to help consumers get out of debt quicker, but to identify homeowners with equity and offer them consolidation loans. If you default on this consolidation loan, the bank can take your house.

#### Consumer Credit Counselling:

Consumer credit counselling services are often funded by the credit card industry. Despite their non-profit status, they report to the credit card industry and may not make your payments on time, potentially damaging your credit further.

Adjustable Rate Mortgages (ARMs):

ARMs allow people with no credit history to purchase homes by offering lower initial payments that adjust over time. However, as interest rates rise, so do the mortgage payments, leading to potential mass foreclosures.

Current Foreclosure Rates:

- Indianapolis leads the nation in foreclosures.

- Atlanta and Dallas-Ft. Worth follow closely.

As interest rates rise and jobs continue to be outsourced, we may see a foreclosure crisis surpassing that of the 1980s.

Conclusion

Consumers need to be aware of the potential pitfalls in the current financial climate. Rising interest rates, higher credit card payments, unpredictable fuel costs, and depressed home values are significant risks. It’s crucial to understand the terms of your mortgage and credit agreements, seek trustworthy financial advice, and be prepared for possible financial challenges ahead.