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(EMAILWIRE.COM, February 13, 2007 ) Sacramento, CA -- More than $1 trillion in adjustable rate mortgages (ARMs) will reset this year bringing higher monthly payments and a corresponding increased risk of foreclosure to thousands of homeowners, says Patrick McGilvray, president of http://www.TheHomeBuyingCenter.com a Sacramento firm that buys homes directly from owners.Analysts are divided on what this change will mean for the American and global economies, but many families and commentators are worried, says Mr. McGilvray.Many Californians, and their counterparts in the rest of the country, live paycheck-to-paycheck and, because of unrestrained credit card spending, actually spend more than they make every year, he says.He points to statistics from real estate information company DataQuick Information Systems of La Jolla that say in 2000 only 18.9 percent of homebuyers in the Sacramento region purchased properties using ARMs. This number dropped in 2001 to 12.1 percent, but spiked to 65.1 percent in 2004, and 72.8 percent in 2005. The number for 2006 was 62.5 percent.ARMs were created for sophisticated buyers who planned to live in a given house for a few years, but their use has mushroomed dangerously, he says.“Offering people long-term credit secured by a mortgage on a single family home has been one of the tools that helped fuel the American dream of home ownership,” says Mr. McGilvray. “In recent years though, this tool has become perverted and only a very few will ultimately profit. In years past people could not buy a home until they showed that they had the discipline, or luck, to be able to provide a 20 percent deposit on the home they wanted. I believe that 100 percent financing arrangements and the proliferation of ARMs will ultimately hurt the American consumer and our economy as a whole.”The deterioration in fiscal responsibility of average Americans has been a trend for a long time, but in recent years the skyrocketing value of homes in the West, especially the Central Valley, Mr. McGilvray says.http://www.centralvalleybusinesstimes.com/stories/001/?ID=4188Contact:Patrick McGilvray, J.D.Tel: 916-920-3278manny@thehomebuyingcenter.com
Patrick McGilvray, J.D.
Patrick McGilvray, J.D.
manny@thehomebuyingcenter.com 
Source: EmailWire.com
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