I have been saying thing are going to get worse with the amount of foreclosures when the 5 year arms adjust. I believe that to be true. What I didn't factor in was how the economy is going to factor in with those folks that bought a home at the limit of their budget. Yes the interest rate is fixed, but the income isn't. There are many people that went ahead and financed a 15 years note at a fixed rate. They sucked it up and knew that for 15 years they were going to have a high mortgage. But what they didn't count on was the unemployment rate rising to the highest rate in over a decade.

So what did these people do, they saw the low rates and scurried to the banks to refinance at a low rate for a 30 year mortgage. They have equity, no problem right? Oh... big problem. Appraisers are using dilapidated foreclosed homes as comps. Homes that have been abandoned, ones that have leaky roofs, ones that have black mold growing in the attics and walls, and homes that have been foreclosed on that have been stripped, no A/C or cabinets, or appliances. Yes, that is what is happening in the appraisal industry. They were blamed for inflating the values of homes in the increasing market and blamed for the crash. So now they are going to get back at the housing market and devalue it faster.

Now these people are being hit with the decrease of income from the economy. So they contact the lender to try and see if they can qualify for one of those new finagled loan modifications that the President so proudly said is now available. But guess what. You can't get any lender to even talk to you unless you have missed 3 payments. So let me get this straight, unless I give up and miss 3 payments, the government won't help me. I feel that this is UNAMERICAN. All I wanted to do was refinance from a 15 year note to a 30 year note. To offset the burden of my spouse being laid off because of the economy by having a lower monthly mortgage payment. I will not miss the payments and destroy my credit. But if I do. I will probably have the same anger as most Americans in this position and tell the bank to stick it and foreclose on me. My credit will already be ruined.

If you noticed, I changed to first person in the blog. That's because I went through this personally.