Is the buyer's market here yet?

'Exotic' mortgage bargains may bite, from the Arizona Daily Star, reports that the FDIC said housing market conditions "warrant monitoring" in part because of the proliferation of riskier interest-only and negative amortization mortgages in recent years, which made up 55 percent of all Arizona mortgages taken out in 2005. Charles "Chip" Ruscher, a lecturer in the Eller College of Management department of finance called the state numbers horrendous. "When you have kind of a bubbled real estate market, you're looking at probably inflated values. Even if the bubble doesn't pop, if it starts to deflate, those people are going to be in a position that's going to be impossible to repay the loan. If the real estate market stalls, slowdown or starts to decline, then they're stuck with an asset that isn't worth as much as what they owe on it," Ruscher said.

'Exotic' mortgage bargains may bite
http://www.azstarnet.com/sn/printDS/124069



Homebuyers feel pinch of rising rates, from MSNBC.com, reports that as adjustable rate mortgages expire, homebuyers are feeling the pain of rising mortgage rates. Last year, 43 percent of all US mortgages were adjustable or "exotic" in nature. But borrowing costs have been climbing for two years, in some cases to nearly double what they were in 2003 and 2004, just when the introductory low rates on adjustable rate mortgages are set to expire. That means that homebuyers who were once paying just over 3 percent interest are suddenly facing rates that at 5 or 6 percent and still climbing. Economist are bracing for an onslaught of late payments and the inevitable worry among lenders and borrowers alike that failed loans will cause a consumer or housing collapse.

Homebuyers feel pinch of rising rates
http://www.msnbc.msn.com/id/12239581/