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Article #2018A loan that'll get ugly fast
From: Anonymous Sender
Date: Fri, 15 Dec 2006 05:05
Date: Fri, 15 Dec 2006 05:05
34 lines
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2451 bytes
EVERY day, Will Hertzberg owns a little less of his three-bedroom house in Corona. Like hundreds of thousands of other homeowners around the state, Hertzberg has a mortgage that lets him choose how much he pays each month. Like many of them, he always chooses to pay as little as possible. For the moment, this allows the 56-year-old Hertzberg to continue living in his tract home despite being only marginally employed. But his debt is swelling, and his mortgage company controls his fate. "I am rather screwed," he said. Hertzberg could sell now, but his lender would charge him an $11,034 prepayment penalty � money he doesn't have. Yet if he stays, the housing market may tank, vaporizing what little equity he has left. "I made choices, and they happened to be the wrong choices," said Hertzberg. In 2003, only about 8 of every 1,000 people buying a home or refinancing a mortgage in California got a pay option loan, according to San Francisco-based data tracking company First American LoanPerformance.Last year, 1 in 5 loan applicants got one. COUNTRYWIDE sees little risk of widespread foreclosures.
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