Everyone is assuming the interest rates will stay the same. I question that assumption.
A borrower who couldn’t afford the 2004 sale price at a 5.5% conventional rate isn’t going to be doing any better with a 6.5% rate, and that’s if they even have enough equity to refinance into a 90% LTV first.
That’s not to say we shouldn’t all be nervous – every time the gov’t throws money at the mortgage lenders they are contributing to inflation. And rewarding misconduct. We should all object to the bailout schemes on that basis alone, if for no other reason.
I detest the idea of paying for some MBs Hummer or some flipper’s MBZ.
