Uneasy Rhetoric

This comes as no surprise. Think it is an anomaly? I doubt it. This is what you get when you have grossly high housing prices, exuberant lenders and desperate borrowers:

In Sacramento County during the second quarter of this year, the number of homes going into foreclosure stood at 1,866. That compares to 857 foreclosures for the same time last year — an increase of 118 percent.

I did the math. My wife and I recently looked at some homes priced below the area median. We discovered that, with a particular kind of ARM, we could, in theory, get a loan big enough to buy the house and exhaust our savings. So, after working out a bare-bones budget, and factoring in the impending child care and other life changes, I discovered that we could easily find ourselves in the red, dependent on credit cards — going into more debt just so that we could call ourselves “homeowners.” And then there’s the little factor of the AR in ARM. If our payments went up (and they would), we’d be, to be technical about it, screwed.