Reply #3: Relief is on the way via the courts [View All]

[Warpy]

because there was a ruling just a few days ago that some of the ARMs, interest only, and other subprime loans were inherently unfair and should be rewritten.

Any loan that was 3% below the going rate for a prime, 30 year fixed mortgage or which reset within 3 years or less is presumed to be inherently unfair, the first for a bait and switch teaser rate and the second for too short a period for a large interest jump.

My best guess is that this ruling will stand. Homeowners who have stable employment should be able to convert their loans to a standard fixed rate mortgage at either the going rate now or the going rate when they were pushed into a subprime loan and at minimal cost to the mortgagee.

People who had no business trying to buy a house they could never realistically afford and people who were speculating on real estate will be hurt. I'm afraid little can be done about those. People who were sweet talked into assuming more risk than was necessary will come out OK.