Announcer One: Welcome to the BBO's (Bob's Box Office) coverage of the rubber match between the reining world champion Fixed Rate Mortgage vs. the challenger, a scrappy not to be put down roust about, the Adjustable Rate Mortgage.
Coming into today's bout both competitors have had their day in the sun. The Adjustable Rate Mortgage experienced a meteoric rise in popularity during the recent boom in real estate values, but has been experiencing a strong downturn in consumer sentiment as housing prices have stagnated and interest rates have risen.
During this same time period, while still making up the majority of home loans made, the Fixed Rate Mortgage lost some of it's luster in the eyes of the public due to the cost associated with having the interest rate fixed.
Announcer Two: That's right Bob. Many folks were simply too impressed with the Adjustable Rate Mortgage's low payments to even consider the down side risks involved.
Announcer One: Good point Bob, wasn't it also true that with the rise in home prices, particularly on the coasts, that an Adjustable Rate Mortgage was the only way that many people were able to qualify to purchase a home?
Announcer Two: True Bob, but, correct me if I'm wrong, but isn't it these very people who are in the most trouble as the loans that they took in order to keep their payment down have entered into the adjustable phase of the loan. That many of these people can no longer afford the new, higher payment?
Announcer One: Another excellent point Bob! To make matters worse, many of these home owners who used an Adjustable Rate Mortgage to qualify to buy the house now own houses that are worth less than what they were when they bought the house and are stuck between a rock and a hard place.
Announcer Two: Exactly Bob! They no longer can afford to own the house, but since it's value has gone down, they cannot afford to sell the home to get out from underneath the debt.
Announcer One: That brings us to an excellent time to introduce a very special guest. Former world heavy weight champion, Payment Option Arm! Payment Option Arm, welcome to our telecast of today's fight.
Payment Option Arm: Thank you bery much. I'm appy to be ere.
Announcer One: So, Payment, it sounds like you've still been getting beat up here lately. Is it true that even Congress is looking into allegations that you're the cause of the recent troubles in the real estate industry?
Payment Option Arm: Yeah, it's tru. Everybody wants to blame me. Day say that I wasn't honest with da people. That I didn't tell dem wat to expect. That I ripped da people off. And it's just nat tru! Everybody that took me out knew wat 2 expect. I didn't lie to nobody. I even sent dem forms in da mail! IN DA MAIL I TELL YA! IN DA MAIL!
Announcer Two: Okay big fella, it's alright. Calm down. So, who do you think is going to win today's battle? The favorite, the Fixed Rate Mortgage or the underdog, the Adjustable Rate Mortgage?
Payment Option Arm: IN DA MAIL! I tell ya. I didn't do nything wrong! I warned dem! I truly did!
Announcer One (as Announcer Two directs Payment Option Arm away from the cameras): Well folks, sorry about that. It seems that Payment Option Arm has taken quite a beating here recently and might be ready for a rest.
Announcer Two (returning from sitting Payment Option Arm down - we can still hear him in the background though - I was robbed! Look at my low payment! IM DA BEST! IM DA BEST!: It's really sad Bob, Payment used to be one of the most popular loan programs around. I wonder if just too many people abused the poor ole program?
Announcer One: Well, that might be true, but for now, both fighters have entered the ring. Let's hand it off to our ring announcer, Ben Bernanke.
Ring Announcer Ben Bernanke: LET'S GET READY TO RUMBLE!*
*("Let's Get Ready To Rumble" is a copyrighted trademark, it is used here as a parody)