Did the illegals and there millions of fake loan documents collapse our mortgage market?

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Its now obvious the greedy banks loaned money to the hordes of crimminal illegals now skipping of to mexico with re financed money. Thanks guys!

I bought my first home two years ago. I recently received a letter from my mortgage company stating that I had an ARM mortgage and my interest rate would be changing in a few months. So I decided to get out my paperwork from the loan officer and see what exactly they were talking about. I did a little research and I think that my margin (which is 4.0) will be added to the Libor Index rate and that will be my new rate. Is this right?

The other thing I wasnt sure about is what do the following mean?

Index: 5.2 and Caps: 2/2/6

Thanks for any help you can give. I am completely lost.
Thank you for all of this information! I am beginning to see that my great homebuying skills are actually someone else great moneymaking skills. To answer the questions below…I live in Texas and my interest rate started at 8.75. I know…. downhill from here.
And the loan documents state 6 month Libor.

13 Comments
  1. Reply
    Ginger
    February 5, 2011 at 3:32 pm

    Maybe it’ll come back to bite the Corporations .
    Sad thing is , the American taxpayer will have to pick up the bill .

  2. Reply
    Joel W
    February 5, 2011 at 4:00 pm

    Yes. That, along with others, were the famous sub prime loans and those were, part and parcel, fake ID’s galor.

    I would like to see the books on this. We won’t be allowed to do so.

  3. Reply
    Nitzia V
    February 5, 2011 at 4:08 pm

    Hmm Okay,

    I wouldn’t call it fake loan, no matter how you put it, it’s still a loan. Lets try to get the Real Estate Agents that promises the land of hope and NOT double and triple check who they are selling to, sometimes they know. I also blame the banks for not following up with the status of there borrowers. I guess it’s all about the money, profits, stocks, etc…

    Some people will do anything for a commission and others will steal identities to gain benefits. The ball rolls both ways here buddy.

  4. Reply
    I'm gonna start another riot
    February 5, 2011 at 4:41 pm

    The chief executive officers of Fannie Mae stand to collect millions of dollars in severance compensation in the wake of the government’s takeover of the mortgage giants, The New York Times reported. Fannie Mae’s Daniel H. Mudd could get $ 9.3 million in severance pay, retirement benefits and deferred compensation if his dismissal is “without cause,” the consulting firm James F. Reda & Associates told the Times. And Freddie Mac’s Richard F. Syron could get a package valued at $ 14.1 million after a clause was added to his employment contract in mid-July, the Times reported. Investors are objecting to the prospect of the big payouts, the Times reported, adding that whether the executives actually will collect remains unclear.

  5. Reply
    Game Over03
    February 5, 2011 at 5:35 pm

    of course they were , didn’t u know than they caused godzilla to attack japan more than once !? oh and yeah the tsunami it was totally their ( not there ) fault .

  6. Reply
    ROADRUNNER
    February 5, 2011 at 6:10 pm

    I’m sure that is partly true. The illegals are stretching the US services to bankruptcy and our taxes pay for it.

  7. Reply
    GreasyTony
    February 5, 2011 at 6:48 pm

    OMG! what next?…..the WAR? did illegals create the war to?

    Can you please provide resources that illegals have something to do with what you are saying? If there are loans that have defaulted by illegals, it’s because of our new great immigration laws and immigration raids that have been going on this year. So maybe the Federal Government should pick up those loans because they were getting paid while the immigrants were here. HMMMMMMM!

    People seen this coming in 2007:

    http://www.freerepublic.com/focus/f-news/1912546/posts
    Despite the downturn of the mortgage market, a type of home loan has remained surprisingly sturdy: one extended to illegal immigrants.

    Now, the question is whether these loans will continue to hold up. A number of factors — including a possible government crackdown on illegal workers and a slowdown in job prospects for undocumented laborers — threaten the ability of these borrowers to keep paying. And there are signs of a slowdown as some lenders have raised the interest rates they charge because of the recent mayhem in the credit markets.

    SO WHO’S FAULT IS IT NOW????

  8. Reply
    Ida Slapter
    February 5, 2011 at 7:28 pm

    I still can’t get over the guy who made 9 dollars an hour but got a 600,000 dollar house!

  9. Reply
    Mary
    February 5, 2011 at 7:35 pm

    That’s a ludicrous theory….how about we stop blaming everyone else for our greedy American ways. This is sadly the age of plastic and Americans trying to live beyond their means!!! You can’t honestly say that with the astounding rate that new houses and subdivisions were popping up that no one saw this coming….GIVE ME A BREAK!!!

  10. Reply
    Matt K
    February 5, 2011 at 8:05 pm

    The index to which your rate is tied is LIBOR. Your margin in 4 percentage points.
    There is a 3 month, 6 month and one year LIBOR rate. Your note should specify which specific LIBOR rate it’s tied to.

    You simply take the current LIBOR rate and add the margin of 4 to get your new interest rate.
    Currently, the 1 year LIBOR rate is 3.72. Add 4 points and your new rate would be 7.72 if it’s tied to the 1 year LIBOR rate.
    Check the current rates and your new payment amount at bankrate.com

  11. Reply
    tampabaycreditdoctor
    February 5, 2011 at 8:15 pm

    It means that your initial fixed rate period is for two years, the second two means that your first adjustmemt can not go up more than 2% of where you originally where at. The six means that you can never go higher than 6% of where you started at. If you started at 6%, you will never be higher than 12%, assuming you kept the loan the entire 30 years.
    You are right about adding margin to index to come up with your adjusting rate. It might be fixed for 6 or 12 months.

  12. Reply
    Sharon B
    February 5, 2011 at 8:42 pm

    Your margin is where your loan officer made big money off your loan. The higher the margin the more money or rebate paid to the loan officer. A good margin is 2.5 to 2.75 over 3 is high. Your margin will never change. Your index changes with the market. So, if the index is 5.2 and the margin is 4, you add the two together and that is your new rate. Usually, on the first rate change there is not a cap. This means your loan can go to 9.2% The caps on your loan seem odd. Normally, a cap is the max change in a year or in 6 months. Example 2% per year or 1% every 6 months is the max cap or increase in the interest rate AFTER the first change. The 6% is the max life cap. What I tell all my clients is …lets see what the lender states your rates is going to be, then we will make a educated choice on what to do with your mortgage! Your problem is the margin is so high, the rate will be also. What state are you in?
    Sharon

  13. Reply
    saeed q
    February 5, 2011 at 8:56 pm

    Here is a link explaining it all pretty well, WITHOUT TRYING TO SELL YOU SOMETHING.
    http://www.bankrate.com/brm/calsystem2/calculators/mortgageresetcalculator/default.aspx

    A lot people giving advice are also looking to give you a loan (its not advice, its advertising), if they are not local to you and you can’t get to them within 1 hour don’t fall for it. They say they are licensed in all 50 states, what does that mean? Which state do you have to look in first if something goes wrong? KEEP IT LOCAL, STAY SAFE.

    Remember Buddha’s advice:
    “Believe nothing, no matter where you read it or who has said it, not even if I have said it, unless it agrees with your own reason and your own common sense.” You are the only “expert” you can trust: All brokers, and every other loan officer guru giving advice here with a .com or contact me at the end is “selling” you something (its not advice, its advertising). Don’t buy “it.”

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