[4RE KLR]

OK,
I also think Scott is right but we all know unless the government steps in a regulates the mortgage companies that will never happen. I think it is a wonderful idea. I know on our home the mortgage was sold twice before we closed on it when we moved in and three times before we made the first payment. So in a period os 45 days it had sold five times. We had no idea where to send the payment.

The "exotic" mortgages were based on LIBOR, which is "London Inter Bank Overnight Rate" (or something like that) Non the less it is the rate that banks borrow money from each other, overnight in LONDON, England.

Now today the LIBOR rate is still very low, at 1.25% today. The mortgage companies have taken this as a starting benchmark and raised the rates every six months since these notes were originated. Now, why do they do that when the LIBOR rate is low, and the overwhelming majority of homeowners on the LIBOR ARM are not making the payments as scheduled????? Why, GREED>

I believe ( my opinion) that the mortgage companies are doing this to themselves. If they choose to keep the rate the same, which is still more than the LIBOR rate they are still ahead. But they choose to raise the rate and take the homes back. I just don't get it.

Fred,
I greatly respect you and your input, but everyone can't pay cash for their home. If they could then we would not be in this position. I think your question is WHY, more than anything. I think the answer is we as builders we "sold" on the plan in large numbers by the mortgage companies. We were courted with potential upswing in sales and sugarplum dreams. Problem is our cost skyrocketed at the same time so our profits actually diminished.

Again as to why. People actually believed what the mortgage companies were telling them. That by the time the first rate increase would come along everyone would be making more money.

I think if the Fed lowers the interest rates it would give a false sense of security to the public and it would bail out the mortgage companies. It would also cost the auto industry another fortune or two. We cannot keep asking the FED to bail us out of our stupid mistakes. I think the mortgage companies are guilty as we are for accepting and they should also pay the ultimate price.

Countrywide has tapped $12.7 Billion line of credit and now they have borrowed another $2 Billion from Bank of America. The TV commercial say "they are the largest in the country, they can do what they want to" Yes they can go broke just like everyone else.


Wayne,
What is the ticker symbol? It might be a great buy in on a penny stock level??

Edited for spelling error