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View Full Version : A.R.M.'s and those evil banks-NOT



luvmylabs23139
09-25-2010, 11:10 AM
So I'm really tired of the dums claiming that all ARM's are bad and it is all the big bad evil banks fault.
If you understand (make an effort to know and read it) ARM's can be a really good move.
7 year ARM locked in at 5.875 end of 2001 (closed late 10/01)
first reset 4.75
second reset 3.125
3'rd reset effective 11/1/10 3%
Who's the winner? ME!!!!:p:p:p
Our bank hounded us from year 5-7 to refinace to a fixed and we told them to call us when they could beat our reset rate plus the refi costs. They finally quit about year 6 1/2.
We still get tons of unsolicited refi offers from many brokers in the mail.
Do they think we are stupid?
Every reset so far has helped me reduce my principle by large amounts since I have the common sense (THIS MAY BE A KEY POINT) to continue to pay my original mortgage payment.

depittydawg
09-25-2010, 11:21 AM
So I'm really tired of the dums claiming that all ARM's are bad and it is all the big bad evil banks fault.
If you understand (make an effort to know and read it) ARM's can be a really good move.
7 year ARM locked in at 5.875 end of 2001 (closed late 10/01)
first reset 4.75
second reset 3.125
3'rd reset effective 11/1/10 3%
Who's the winner? ME!!!!:p:p:p
Our bank hounded us from year 5-7 to refinace to a fixed and we told them to call us when they could beat our reset rate plus the refi costs. They finally quit about year 6 1/2.
We still get tons of unsolicited refi offers from many brokers in the mail.
Do they think we are stupid?
Every reset so far has helped me reduce my principle by large amounts since I have the common sense (THIS MAY BE A KEY POINT) to continue to pay my original mortgage payment.

ARMS can work out good for consumers. It's a gamble. Congratulations! You won. Unfortunately a lot of consumers loose. Personally I don't blame banks. ARMS were a creation in high market real estate areas where people generally could not qualify for the amount of loan they needed to purchase a home. Anybody who thinks a bank is looking out for them and trusts without understanding is on their own and is playing the role of a fool.
Where banks have turned 'evil', to use your phrase, is in their greed. I do hold them to account for charging someone a 40 dollar over draft fee for purchasing a one dollar pop 15 minutes prior to going to the bank and depositing the money...

dnf777
09-25-2010, 11:33 AM
So I'm really tired of the dums claiming that all ARM's are bad and it is all the big bad evil banks fault.


Its not. Its the dumb middle-class young republicans who think they're entitled to $600,000 homes, when they're making maybe 100k, and default on their loans when the rate bumps.


(now, I don't really think its only republicans who default on irresponsible mortgages....but then again, its not just democrats who complain about ARMs either) ;) Lets keep it real.

luvmylabs23139
09-25-2010, 11:47 AM
Its not. Its the dumb middle-class young republicans who think they're entitled to $600,000 homes, when they're making maybe 100k, and default on their loans when the rate bumps.


(now, I don't really think its only republicans who default on irresponsible mortgages....but then again, its not just democrats who complain about ARMs either) ;) Lets keep it real.

You are totally missing the point. There is a huge difference between a 1 year arm and a 5 or 7 year arm.
I was referring to the dums in power like Barney butt bumble and crew.
If the home buyer, for any number of reasons does not plan on living in the home for more than 5 years there is no reason to pay a higher rate for a 30 year fixed. There is also no reason to convert the mortgage to a fixed based on pressure from the bank. You will note I stated the bank was trying for almost 2 years prior to reset to convert to a fixed for a fee and we told them to pound sand.

JDogger
09-25-2010, 11:56 PM
You are totally missing the point. There is a huge difference between a 1 year arm and a 5 or 7 year arm.
I was referring to the dums in power like Barney butt bumble and crew.
If the home buyer, for any number of reasons does not plan on living in the home for more than 5 years there is no reason to pay a higher rate for a 30 year fixed. There is also no reason to convert the mortgage to a fixed based on pressure from the bank. You will note I stated the bank was trying for almost 2 years prior to reset to convert to a fixed for a fee and we told them to pound sand.

Good for you luvy, good for for you. Remember, interest rates are a two-edged sword. JD

luvmylabs23139
09-26-2010, 10:23 AM
Good for you luvy, good for for you. Remember, interest rates are a two-edged sword. JD

Only if the person treats the reduction as found money. We pay the original amount of our mortgage. At this point we will be paying an extra aproximately $700 a month against principle. That means that this year we will pay down an extra $8400 against the balance of the mortgage. Actually that amount will be more since we always toss money at the principle. When we reset next year, the current balance will be spread out over the remaining years of a 30 year mortgage. If we have any financial issues our actual mortgage payment will be even less than it is as of 12/1/10.

code3retrievers
09-26-2010, 10:37 AM
Where banks have turned 'evil', to use your phrase, is in their greed. I do hold them to account for charging someone a 40 dollar over draft fee for purchasing a one dollar pop 15 minutes prior to going to the bank and depositing the money...

You agree to their terms. If you don't have the money in your account don't make the purchase until you do. Its pretty cut and dry. Its not their job to make a loan to you for 5 mins or 5 days on your checking and if you don't like it try using good old fashioned cash.
Is $40 high? Maybe but it will make you think twice before you use the banks assets for your pop purchase.

I would call you arrogant to think that someone else should cover either your lack of book-keeping or intentionally using the banks money with our their permission even for 15 mins,

By the way most banks can give you some type of overdraft protection if you look into it.

depittydawg
09-26-2010, 10:53 AM
You agree to their terms. If you don't have the money in your account don't make the purchase until you do. Its pretty cut and dry. Its not their job to make a loan to you for 5 mins or 5 days on your checking and if you don't like it try using good old fashioned cash.
Is $40 high? Maybe but it will make you think twice before you use the banks assets for your pop purchase.

I would call you arrogant to think that someone else should cover either your lack of book-keeping or intentionally using the banks money with our their permission even for 15 mins,

By the way most banks can give you some type of overdraft protection if you look into it.

You try to personalize this in error. I have never had an overdraft fee on any of my accounts. I know how the system works because I worked in banking for several years. I've had people at my desk facing at times hundreds of dollars of bank fees that were completely bogus. The banks gamed the system. Electronic transactions do not transfer any funds anywhere until the end of the work day. When it became possible to implement TOP, time order posting because of technology improvements, many banks saw the dollar signs and jumped on the opportunity. You want to call me arrogant, ok, that's fine. But I'd call you a fool for supporting a crooked system will likely swindle you, or someone else out of your money.

code3retrievers
09-26-2010, 02:23 PM
You try to personalize this in error. I have never had an overdraft fee on any of my accounts. I know how the system works because I worked in banking for several years. I've had people at my desk facing at times hundreds of dollars of bank fees that were completely bogus. The banks gamed the system. Electronic transactions do not transfer any funds anywhere until the end of the work day. When it became possible to implement TOP, time order posting because of technology improvements, many banks saw the dollar signs and jumped on the opportunity. You want to call me arrogant, ok, that's fine. But I'd call you a fool for supporting a crooked system will likely swindle you, or someone else out of your money.


I'm no fool. Its never happened to me because I keep my finances in order as others should do the same. I can tell your a liberal because you cant take responsibility for your mistakes and want to blame the system, government, banks, insurance, big oil, military industrial complex. The list can go on and on. I commented on the specific example you gave. If you don't like it use another bank or deal in cash. Take some responsibility and quit blaming others.

JDogger
09-26-2010, 03:52 PM
Only if the person treats the reduction as found money. We pay the original amount of our mortgage. At this point we will be paying an extra aproximately $700 a month against principle. That means that this year we will pay down an extra $8400 against the balance of the mortgage. Actually that amount will be more since we always toss money at the principle. When we reset next year, the current balance will be spread out over the remaining years of a 30 year mortgage. If we have any financial issues our actual mortgage payment will be even less than it is as of 12/1/10.

What I meant by a two-edged sword is when rates go down for interest charged it goes down as well for rates of interest earned. Interest bearing instuments are also extremely low right now. CD's moneymarket,etc.

depittydawg
09-26-2010, 05:22 PM
I'm no fool. Its never happened to me because I keep my finances in order as others should do the same. I can tell your a liberal because you cant take responsibility for your mistakes and want to blame the system, government, banks, insurance, big oil, military industrial complex. The list can go on and on. I commented on the specific example you gave. If you don't like it us another bank or deal in cash. Take some responsibility and quit blaming others.

Look, you're a sharp guy. So I'll explain the details of how this works and you make your own call. At the end of every business day every account is debited and credited for all activity that occurred during that day. After that, transfers are made. If an account comes up short, an error has occurred, usually by the owner of the account. The bank covers the error and charges an overdraft fee. That is traditionally how this system worked. Bank assumed a liability by covering the charge, and charged a fee for it.
Now enter the ability to do Time Order Posting. Accounts are still reconciled nightly at the end of the work day. So no money has transfered anywhere until that time. But now the bank, because of TOP, can determine the order in which transactions occurred during the day. The debits and credits post and low and behold a card was used, or a check cashed at 12:00 and the deposit didn't clear until 8pm. There has been no transfer of funds. There has been no liability incurred by the bank. There has been no loan, no interest. Nothing other than a computer record of what happened and when it happened. So for every posting of a credit that occurred you get charged 40 dollars, regardless of the fact that at settlement you did NOT overdraw. Sorry, but to most people, that's a rip off.
As to who gets caught in this trap. It people who live paycheck to paycheck. Young adults who don't understand all the details. Housewives who are spending a day running errands, paying bills, buying groceries, etc. Those are the folks who end up behind the desk at the bank trying to understand how they owe hundreds of dollars for no services rendered.
For me, I don't think banks need to swindle people out of money to make money. There are plenty of legitimate means for Banks to earn their keep. They don't need to resort to thievery.