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Financial Mess

Welcome back!

Since everybody seems to be offering opinions about the current financial crisis going on I figured that I'd jump in and offer some of my ideas just for the heck of it. From what I know, the whole thing that's led up to the fire-sale of Bear Stearns can be traced back to a whole lot of lenders getting into sloppy, even dangerous lending practices that led to mountains of bad debt and record numbers of foreclosures.

In their headlong quest for money, they made mortgages very easy to get. Entirely too easy as it turns out because all those variable rate mortgages that people were picking up like crazy didn't look so good when the rate varied upward and things started getting expensive. Next thing you know people can't make their payments and end up losing their homes wishing they'd locked in on Fixed Rate Mortgages instead. At least then they'd not have had to worry when the rates went up.

One of the keys to not losing your home is to make certain you can deal with the interest rates on your mortgage. Fixed rate might sound like a trap if the rates go down but you can always refinance if you have a chance to get a lower rate. On the other hand, if the rate goes up, you can relax, knowing yours is fixed before the increase happened

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