Exotic Loan Programs Always Fail Posted By : Robert Thomson
Posted: April 14th, 2009 | Author: admin | Filed under: Mortgage Now | No Comments »Exotic Loan Programs Always Fail Posted By : Robert Thomson
Over the last 60 years since World War II ended, a number of experimental loan programs have been attempted. These include interest-only loans, adjustable rate loans, and negative amortization loans among others. It is this group of loans that has consistently failed in the past for one simple reason: if payments can adjust higher, people will default. High default rates doom mortgage programs because these high default rates will eventually cause large default losses for the holders of these loans.
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