--- In FairfieldLife@yahoogroups.com, akasha_108 <[EMAIL PROTECTED]> wrote:
>
> This, if a continuing trend, would signal a trend in the
> (long-anticipated) rise of long term bond rates -- the "solution" to
> the conundrum Fed Chariman Greenspan has been commenting on for some
> time - the flattening of the yield cure -- the rise in short term
> rates (that the Fed can highly influence) while long-term rates (upon
> -- which fixed mortgage rates are based -- and the periodic 
adjustment
> in ARMS are pegged) are flat or declining    
> 
> Steadily rising mortgage rates may be trigger for housing price
> deflation --- (the bursting of the housing bubble) given that it has
> contorted itself to such unsustainable levels. >>


Are you aware that all mortgages are subject to less than a 3 percent 
rise each year by law, and most have a cap of how much they can rise 
above the initial rate. So if you have an 8% rate then, under the 
worst case scenario, your rate would go to 14% and that would be the 
highest allowed by law. Therefore the mortgage rate increase is not as 
dire as people think. It is not like your rate could go up to 20% or 
30% or something. Are you aware of this?

These types of caps are what keep people interested in getting 
mortgages and those mortgage companies that don't offer them as a 
matter of course are going defunct.

OffWorld





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