HOME MORTGAGE USURY

Will You Survive The Coming Financial Crash 18
© 2005 Kent Daniel Bentkowski
The thing that keeps this system afloat is by consumers continuing to spend money they
do not have. The banks have been pushing the variable rate loan because of the huge
upside potential. Please remember that in January 1980, interest rates had risen to a
ghastly 18%. It would then take nine years for interest rates to drop below 10%, resting
at 9.75% in 1989. However, at that same time, January 28, 1980, Gold had risen to its'
all-time high of $850.00 an ounce, but I will talk more about that in a minute.
Even with the Federal Reserve dropping the Prime Rate to a low of 4%, the home
mortgage couldn't be had for anything less than 5.40%, which it had reached in May
2003, and stayed there for much of 2004. Such inexpensive home mortgage rates had
encouraged speculators to play the real estate market, creating a similar environment as
existed throughout the 1990's for the dot.com boom in the NASDAQ stock market.
Such low interest rates encouraged outside investors to come in and take advantage of
the situation, as the dollar was also at a steep discount during this time, which gave
foreign investors more bang for their investment bucks. This has lead to bidding wars for
some properties, with properties typically selling for $5,000-$8,000 above market value.
Currently, in the western boomtown of Phoenix, Arizona, 25% of new home purchases are
being made by California speculators.
However, in the spring of 2005, the biggest players in the real estate market have already
started pulling their money out, which indicates that the next big market crash in the USA
will come in the real estate sector. In the near-term, the biggest gains have been taken
out of the real estate market. This is because for the past eighteen months, the real
estate sector has been seeing double-digit gains. This is highly unusual, given the overall
financial condition of the country.
The result of the bidding-war siege mentality in the real estate market has been to jack
up prices to outrageous extremes. For instance, I bought my home in 1998 for
$100,000.00 in cash, relieving myself and my family from the burden of having to involve
ourselves in a home mortgage, a move that would save us more than $250,000.00 over
the next thirty years. We bought a ranch with 2,500 sq. feet plus a full basement. A home
of these approximate dimensions located in Phoenix, Arizona USA is currently selling for
$250,000.00, and that same home in Santa Barbara, California USA sells for
$750,000.00!!
HOME MORTGAGE USURY :
In my own home purchase, of which our closing date was April 17, 1998 (4/17), I will
illustrate now how banks screw people over by charging unfair interest rates. The banks
and their fancy legal jargon get people to believe that they are paying 7.21%, when in
fact, it ends up being 140% interest, by the time all the interest-compounding takes
place. The total closing cost of my home has been rounded to $100,000.00 for the sake of
an understandable discussion. In April 1998, the Federal Reserve home mortgage interest
rate was 7.21%. If you would care to check my figures, you may go to mortgage-calc.com
at the following link:
http://www·mortgage-calc·com/mortgage/simple·php