The end of the 2/28

Looks like the old sub-prime favorite, the 2 yr adjustable is going away. Because of the public outcry and the resulting Senate involvement, it is now impossible for lenders to offer a 2yr ARM. The upside for the consumer is that they will now have the opportunity to stay in their sub prime loans longer. The downside is that they will have slightly higher start rates on their loans. I think what we are now seeing is a natural selection taking place in the residential lending space. Many homeowners who are losing their homes probably never should have been homeowners in the first place. Where does this all leave us? Most likely with a softening housing market as there are now fewer qualified borrowers on the market...so prices will drop, meaning that in a couple of years, if people can actually save 10% for a down payment and have a decent FICO score, they can buy a house and maybe actually make the payments (remember, no more nasty 2 yr adjustables, and prices will be lower), which means that the nations housing market should then continue along its merry little way....See, like Mom always said...just open your wideand take your medicine...