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Originally Posted by 4RE KLR
Some were as low as .5% for the first 30 days. Most started out at 1.5% or just under 2.0%.
The cap could be done but I don't think it is needed. If the mortgage companies would not raise the rates "just because they can" there would not be a problem. The rates are adjustable, yes, but that does not mean it is a mandatory rate hike. It could just stay the same rate as they have right now and the payments would not change. It is the greed of the mortgage companies that are causing this mess. IMHO.
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OK, so you give some examples of the introductory rates. I assume only an idiot would assume that they would pay the introductory rate indefinitely. So where are the adjustable rates moving too? Maybe something reasonable like 5, 6 or 7 percent? Or is it something outrageous like 10 or 15 percent?
You say the banks are greedy, but they need to make a profit, what does the bank pay to borrow money? Won't they be losing money if they don't bump the rate from the introductory rate to something higher than they can borrow for? Is the answer for the greedy bank to leave the rate at the introductory rate forever and lose money?