David Bach The Automatic Millionaire

Yahoo! Finance User - Wednesday, June 20, 2007, 8:42PM ET  Report Abuse

• Overall: 4/5

I'm with Kevin-the responsibility lies with the borrower. Borrowers should beware of the finance company trying to "help" you with the future of your adjustable mortgage. Understand that they will make another commission off of you-probably more than the first time. Many of you borrowers think you paid no points and no fees-you need to get smart about reading your paperwork-lenders are amazing at hiding $15-$20,000 in fees. In my business, I run into clients on almost a daily basis who insist they paid a flat fee or no fees. When I show them how the fees were packaged, they are blown away. Why do you think these young kids are all getting into lending? Because it is easy to make money quickly-nobody reads their paperwork. Get intelligent America, or you'll all be in foreclosure!

luisa - Wednesday, June 20, 2007, 4:47PM ET  Report Abuse

• Overall: 1/5

The advice in this article can be reduced to one sentenace: Call your lender, ask when your rate will go up, by how much, and if you can refinance. The rest of his writing is just blabbering.

Yahoo! Finance User - Wednesday, June 20, 2007, 3:59PM ET  Report Abuse

• Overall: 2/5

It was an ok article, I would have liked to have seen maybe some advice on how to avoid the adjustable rate going up if credit has taken a slide over the years. We did come in contact with our lender early and they have stated that they can't do anything for us to get our rate to a fixed rate because our credit has gone down the tubes.

Yahoo! Finance User - Wednesday, June 20, 2007, 3:28PM ET  Report Abuse

• Overall: 1/5

It's obvious that the people rating this four or five stars are somehow invloved in the mortgage business. You seem to be struggling with the guilt that you must feel for making a living by deceiving unsuspecting borrowers into getting into loans that you know they will not be able to afford later when they adjust. You want the blame for the very real mess that this country is having to deal with to go to the same people that you USED to make your sales quota. It's pretty disgusting to see all the comments trying to justify what you did, as you try to make the borrower look like an idiot for taking YOUR sales-pitch in the first place. You are worse than used car salesmen and you should be ashamed! And yet you try to make yourselves look as though you offer a noble service. It's a sham, and the blame for selling junk like this, especially with the volumes of disclosures written by and for lawyers - all shoved-down the borrower's face under the pressure of a last-second closing, should and must go to the sellers of this junk - the mortgage brokers and companies behind them.

KevinP - Wednesday, June 20, 2007, 3:07PM ET  Report Abuse

• Overall: 4/5

Im only rating this story as a 4...very imformative for the space available. The part that I find most surprising (not really) are most of the comments from readers who gave this article 2 stars or less, have an issue with the broker who sold them the loan. Im well aware that there are many scammers out there trying to separate you from your money. The final responsibility lies with the end user...the consumer, who bought the product (the loan) and now swear they were scammed. When I bought my mortgage, I sat down and read every page of that contract, and asked question after question. I only signed when I was sure about the information I recieved, and what the outcome would be. Today there are no surprises because I left nothing to chance. Do I feel sorry for you? No! Were you taken advantage of. Yes! But only because you allowed it to happen. Will you learn from your mistake and handle yourself better in the future? I hope so, but you probably wont. Because you still see yourself as being victimized. Other people have commented that you should only buy it, if you have the cash to pay for it. So very true. If payments make it affordable, then you shouldnt have it. And to refinance and draw money out of your home to buy more useless stuff, is just plain stupid. As someone else pointed out, the sad part is the only people who read these articles are the people who dont need to. The people who could benefit the most from these types of articles just turn the page or surf the web till they find something written by someone who says.....Having trouble with your mortagage payments?..Did a mortgage broker miss led you?..We can help. Its time for the sucker to get suckered again!

robin - Wednesday, June 20, 2007, 2:17PM ET  Report Abuse

• Overall: 4/5

Does this include Canadian homeowners,if so than what steps do I take to protect my family?Or should I follow your great advice.I live in Calgary,Alberta,Canada and the market is still booming,will this affect my open rate.

Yahoo! Finance User - Wednesday, June 20, 2007, 12:33PM ET  Report Abuse

• Overall: 5/5

For those slackers who say they didn't know they got a ARM mortgage, I say you didn't read the truth in lending disclosure that clearly outlines that you are signing up for a ARM mortgage. You guys pulling money from your home like an ATM deserve to loose everything. You guys are the same ones who will be waiting for Social Security and Medicare to fund your retirement. My advise to you is live below your means. Start saving money and stop buying things you can't afford. I hope you people learn your lesson soon, before this great country of ours falls into demise because the people of this country choose to sell their future by buying stuff on credit and living the high life. Get out of all debt and save, save, save. You are responsible for signing the documents and agreeing to the terms. You should be held accountable for your actions. It is you, not the mortgage companies, not the investors who buy these mortgages. You people will loose everything and start whinning that you were stolen from. But again you signed the agreement. You and only you singed up for the adjustment. I hate the fact that you people who fell into this call it a trap. Wake up and take responsiblity for your actions. You spent all the equity out of your house, and if the housing market drops and you have to sell for any reason then you will loose out. Your gready, live for today actions got you in this hole, and it should be you that gets you out. Time to face facts and start working 80 hours a week at multiple jobs to dig yourself out of the hole that you and you alone created. As my Dad always said "Hey, No Crying In The Jungle". When I would fall he would say this. Life can be tough, but it is tougher if you are not educated and realize what you need to know to succeed. I have said it in many posts before. Spend Less than you Earn, and save the rest for a rainy day. Invest the savings for your future and you will succeed in this world. For those who don't you will be homeless and on the street and don't you dare ask me for a handout, because you spent your future on IPODS, TV's, Computers, and Payments on things you couldn't afford. If you think you can afford things because you think you can afford the payments then you really can't afford it. Pay CASH for everything. Get a small home and pay it off fast. In 1950's a 1200sq foot home was middle income for a family of 4 or 5. Today our garages are bigger than this. We don't need all this stuff. We don't need to be working our lives away to PAY payments on things we can' afford. TIME TO WAKE UP PEOPLE. If you don't do payments then you will live a rich life. Payments make you a slave. When, you have payments you have to work. You should be choosing to work at something you love, not being forced to work because you have Payments. GROW UP all you selling your future with credit loosers. Thats a capital L for you Loosers.

Yes Its Me - Wednesday, June 20, 2007, 11:54AM ET  Report Abuse

• Overall: 4/5

People need to take more responsibility when they take out a loan/mortgage. I remember when we were looking to take out one for our condo. The first guy we spoke with as saying how we could easily take out this huge loan. Thankfully, I had better sense and did my homework. Turned out there was no way we would have been able to make the monthly payments. Personally, I the the loan/mortgage brokers need to do a better job but the consumer needs to take responsibility too. It is your own damn fault if you don't read the fine print and do your homework ahead of time before signing.

kaye - Wednesday, June 20, 2007, 11:24AM ET  Report Abuse

• Overall: 5/5

Fifty percent of our time is spent explaining and re-explaining option Arms to the folks who are taking out the loans. Who's listening? Also, all adjustable loans here must be qualified on the fully indexed rate so that a borrower does not get a loan that is unafforable.

Yahoo! Finance User - Wednesday, June 20, 2007, 11:21AM ET  Report Abuse

• Overall: 1/5

I understand the frustration expressed by some of previous reviewers. I think the focus on this issue is off. The story should be on how the mortgage industry must be held responsible for selling unsuspecting people these terrible loans (ARMs). They happily take money from borrowers, and the mortgage brokers drive their nice new Hummers, while the people on whose backs they earn their dirty money suffer with unreasonably rising payments. This simply is not right, and I think the focus must be on forcing the companies that benefited from all of this to help fix it. This is another Enron, and I think it's time to make someone accountable.

Yahoo! Finance User - Wednesday, June 20, 2007, 11:10AM ET  Report Abuse

• Overall: 1/5

someone needs to go to jail for all of this bas stuff happening to innocent people like me. i refinanced my house a couple years ago to get money from my investment in my house and to help wityh buying some things. that shark at the mortgage corporation gave me an ARM mortgage. i didn't know it. and he never told me. now my payments are going way up. it's not fair, and i think we need to put all those sharks in jail and those big companies should give our money back!

Yahoo! Finance User - Wednesday, June 20, 2007, 10:42AM ET  Report Abuse

• Overall: 4/5

Adjustable rate mortgages are great for first time home buyers who back when the market was good, could afford more home than getting a fixed mortgage. I guess the lenders and brokers should have known by looking in their crystal balls that the housing marketing would crumble so abruptly. Basically the ball is in the consumers court, you signed an adjustable rate note that spelled out exactly what was going to happen. As a "legitimate" broker, this was explained to all my clients. I guess we should fault all the lenders and brokers for those people that bought a $500,000 house that make $40,000 and thought they could afford that too just paying interest, huh? Lets start placing some of the blame somewhere else for a change (maybe on the consumer) instead of assuming that all "brokers are scum." As a broker who put 1 in 20 consumers into an adjustable rate mortgage don't assume we are all out to make a quick buck at the consumers expense. Adjustable rates mortgages are great for those individuals with less than perfect credit or in bankruptcy to refi, pay off their debt and then refinance into a fixed rate when their scores are better. My job is to help people, not screw people.

First - Wednesday, June 20, 2007, 10:25AM ET  Report Abuse

• Overall: 5/5

I read one of the comments on FreeRateSearch.com and found out I qualified for an excellent loan and will be able to finance to a par rate loan, and the info was free. Great article, great readers.

Mitch - Wednesday, June 20, 2007, 9:35AM ET  Report Abuse

• Overall: 3/5

I agree with being proactive. I know several Home Owners who are in panic mode, due to the market and lenders tightening their standards. The sub-prime market has really caused havoc for a lot of folks. Sub prime has been named the loan for people with bad credit. Which is not really the case. There are also good loans in that market for people who need creative financing such as self employeed, etc. I suggest if you are going to refinance, try to take out enough money to pay your mortgage for 2 years. Put it in a seperate account and have it auto drafted. Hopefully, by then we will see the market turn around. Keep in mind there are still lenders with good products. I am still seeing offers with 600 scores and documentable income at 100 percent financing. I am not sure how long that will last! If you are in Florida, you can visit www.themortgagespecialistinc.com Good luck....

Waz, Dj - Wednesday, June 20, 2007, 9:21AM ET  Report Abuse

• Overall: 3/5

Unless you're in that position, you have no idea what your lender will do. I contacted mine because I knew my rate was going to increase, and as a single mom, I would not have been able to pay all my bills because of that. The lender's response....we can't do anything for you unless you are more than 30 days late..... well morons at National City, I'm trying to avoid being late, avoid ruining my credit, avoid paying higher interest rates etc. and trying very hard to make arrangements so that you get paid and I pay everything in a timely manner. The lender, National City was unwilling to work with me, so I've taken my business elsewhere through Wells Fargo. Divorced less than a year, which gave me a mess on my hands in regards to my credit while married - had no control of the finances while married, but banks could don't care or know that. I have worked hard to improve my score in 6 months by over 100 points, Wells Fargo took that into consideration. In other words, DO NOT COUNT on your current lender to work with you. The greedy SOBs at National City wanted nothing more than to raise my rates, get more money, and at their rates, quickly foreclose on my home, I NEVER would have been able to afford their increases.

Robert T. - Wednesday, June 20, 2007, 9:13AM ET  Report Abuse

• Overall: 4/5

If you are on an ARM, the damage has already been done. Lets move on see what can be done with your situation. Go to www.indigodearborn.com. We have done very few ARM loans and NO Option ARM, Smart ARMs, Pick-a-pay or any negative amortization loan like these. You can call, email or complete the online application. We will review your situation, you may not like the answer we give you, but it will be the truth

SteveP - Wednesday, June 20, 2007, 9:10AM ET  Report Abuse

• Overall: 5/5

As a victim of the recent mortgage debuckle I can tell you that at least for us, Our mortgage company could have cared less. We had the mineral rights with our property and natural gas had recently been located under our area. Our mortgage payment tripled in 12 months. We tried desperately to get it refinanced to no avail for the entire year. Foreclosure was initiated when the note was 31 days past due. When we lost the battle the mortgage company stripped the mineral rights and sold the home for much less than the current market value. This "theft" has been repeated many times in our area by the same lender. Take the advice in this column and get your mortgage secured now. Foreclosures are on the rise and will continue to do so for the foreseeable future.

Yahoo! Finance User - Wednesday, June 20, 2007, 9:08AM ET  Report Abuse

• Overall: 1/5

Not every adjustable rate mortgage is a sham! The authors utterly failed to properly all the variables. My adjustable rate mortgage is working just as the lender promised and I have saved thousands of dollars without ever having to refinance and change the term of the loan.

Pie - Wednesday, June 20, 2007, 9:04AM ET  Report Abuse

• Overall: 3/5

I would like part of the "Solution on the Horizon" section to appear earlier in the article. There is a lot of techno-garb in this article that may lose many readers well before they reach the end to discover viable solutions. Consider your "reader" audience and what they may need first and foremost. Spell out the benefits before slamming them with the scary stuff. One reader's opinion... Thanks for getting the word out!

Mommie L - Wednesday, June 20, 2007, 9:01AM ET  Report Abuse

• Overall: 5/5

Wonderful information. Educate yourselves before you buy. Buying a home is so easy now you could be getting into to MANY adjustable rate loans as builders to thsi to attract buyers. Once the home is sold, the builder has made its money and leaves the homeowners ignorant. Dont be that homeowner . . . be proactive and look for the best deals on loans. Make sure you understand the loan. Get advice.

Unhappy in South Florida - Wednesday, June 20, 2007, 8:57AM ET  Report Abuse

• Overall: 1/5

In theory this is good advice. The reality is that I was was proactive in contacting my mortgage company (3 months before my rate adjusts). After going around in circles with my lender (from the re-fi dept, to the dept that specifically handles adjustables, all the way down to loss & mitigation), I was told there was nothing they could do to amend my current rate (even for 1 year) because that is not their practice. I can't re-fi because I now have negative equity in the house. My mortgage company told me to find a realtor or call back when I start missing payments & they'll see what they can do. Short sale? Sure, just get an offer on the house, send us the contract, the prelim HUD & your W2's then we'll decide if we'll accept the short sale. I make over $100K/yr. I will have to repay the difference to the bank plus find a new place to live. Do you have any idea how long it will take my house to sell (even if I drastically lower the price) when it seems like every other house in my area is up for sale? Great, try to be proactive & they tell you to miss payments which will mess up your credit. My first adjustment is July 1, second Jan 1. I can hold on for 6 months at the new payment, but by Jan I will lose my house. There has to be something done for those who have tried to be proactive, but have been given the cold shoulder by the bank. Sorry to be cynical, but it's time to get realistic.

Mike J - Wednesday, June 20, 2007, 8:57AM ET  Report Abuse

• Overall: 2/5

Decent article but David missed on a very key point. Don't just call your lender to ask about refinancing options. You will generally find a better deal if you shop around a little bit. The advice to just call your lender to lead those who are not so educated about the refinancing process right back to another bad loan because they didn't get all of their options. Come one David, if you are going to write an article to help people get out of their ARM's, at least tell them that they have other options besides their current lender.

Oscar - Wednesday, June 20, 2007, 8:51AM ET  Report Abuse

• Overall: 5/5

Excellent article. Many folks are in a crunch period with their loans and need to act fast with their lenders to stay out of trouble, and this article helps explain just that. If that is not an option, take a look at www.FreeRateSearch.com where you can see what type of loan you qualify for, at the par bank rate, without giving up your personal data, it works great.

Yahoo! Finance User - Wednesday, June 20, 2007, 8:25AM ET  Report Abuse

• Overall: 2/5

As a homeowner whos home value will be affected by the up swing in forclosures. Why doesn't anyone explain why the adjustable rate mortgage were used so frequently. Especially the fact that lenders stand to make more money with refinance charges when the homeowner has to refinance early to adjust their mortgage to a payment they can afford. Adjustable mortgages are great for the lenders but now the effects are kicking in, noone has worked with the politicos and lenders to stop the refinance charges that will affect the loans that so many can barely afford now.

Marcus - Wednesday, June 20, 2007, 8:25AM ET  Report Abuse

• Overall: 4/5

Very good information to have. I think it would help a lot of individiuals from going into default.

Mike - Wednesday, June 20, 2007, 8:22AM ET  Report Abuse

• Overall: 4/5

"The People" are getting screwed once again by this state sponsored / legalized loan sharking. Corporations are absorbing trillions and trillions of dollars in profit from the American people - look at the insurance industry - pharmaceuticals - the oil industry - etc... They are all reaping huge profits and pushing many americans into poverty. Their collective irresponsible approach to family, community and country is just unamerican and criminal. Push the people far enough and they will rise up and take control. It seems that only corporations are represented by our government today. It's time for another tea party. The corporate criminals have squeezed enough profit out of us. Don't you think it's time we squeezed back ?

Yahoo! Finance User - Wednesday, June 20, 2007, 8:20AM ET  Report Abuse

• Overall: 4/5

Attention previous user: I pay rent on the property I live in. If you have a mortgage, you're paying rent on the money you used to buy the property you live in (above and beyond what you're paying to obtain equity). Both of us are paying rent, and neither of us is throwing it away, because we both have places to live.

Yahoo! Finance User - Wednesday, June 20, 2007, 8:13AM ET  Report Abuse

• Overall: 5/5

I know that some mortgage companies are trying to prevent any of this from happening. Quicken Loans has some sort of "loan tracking system" that alerts your mortgage banker to give you a call in plenty of time to explore different options in terms of where to go before your rate adjusts. Having someone to keep you updated is always helpful, because they want to prevent you from all of these problems the previous users have spoken of.

Yahoo! Finance User - Wednesday, June 20, 2007, 8:01AM ET  Report Abuse

• Overall: 4/5

atleast we "stupid" people with adjustable rate mortgages are homeowners and not throwing money away on rent every month. you don't know peoples individual situations, and it is pretty crass of you to make such a generalization.

Jessica - Wednesday, June 20, 2007, 7:55AM ET  Report Abuse

• Overall: 3/5

I have been working as a mobile notary for about 4 years. I am the impartial party who shows up at the door of the borrower to explain the documents and have them signed. I can't tell you how many times I began explaining the paperwork and THAT is when these poor borrowers found out that their "friend", the broker, gave them an adjustable rate loan. Most of the loans I have done are refinance and these people already have the money mentally spent or are WAY behind on other things and are stuck between a rock and a hard place. They call the broker and freak out, because they had been promised a fixed rate and low payment and now have a adjustable rate AND, usually, a higher payment than they were promised. BUT, because of that rock and that hard place, they signed anyway. Even AFTER I told them, "Your payment WILL go up in 2 years. Your interest rate WILL reach 12, 14, 16%." I even had one family who were refinancing their house, at a RIDICULOUS rate AND had a ballon payment in 20 years that was almost the same amount of the loan. They "needed" the money to pay off a car (not both) and about $50,000 in credit cards. I went over the details, twice, because I thought that this was an incredibly bad idea, but they signed anyway. The woman asked me, when we finished, when all the credit cards would be paid, so she could GO SHOPPING AGAIN!!!!! These were NOT young people! They were in their 50's! They had been around long enought to know better! By the time the loan matures, they SHOULD be retired and on a fixed income. I would be willing to bet my own house that those two will be facing foreclosure at some point. People need to KNOW what they are sigining. They need to buy homes that aren't costing them 3/4 of their income. If this is their first home, get someone with experience to help them, a lawyer or a friend; someone who has KNOWLEDGE and isn't making money on the deal!! BUT, these brokers also need to have SOME moral fiber. They KNOW that these people can't afford these homes and yet, sell them on the loan anyway. Ok, getting down off my soapbox now. Hope this helps!