We've been hearing about the crashing home mortgage situation for months, and how more and more people who got ARMS are now having to foreclose on their house. Home owners who can afford it are switching over to Fixed Rate Mortgages. But for many it's too late. I've followed the news stories with mild interest, and with some wondering if I might finally be able to afford a house, with so many foreclosures.

Then, this weekend, I found out that friends of mine have lost their house. Not lost in the sense of they can't quite remember where they placed it. They lost it. Their fixed rate mortage has gone up so much that they are having to come up with an extra $500 a month. They've had a few other unexpected expenses lately, nothing to much to handle, but all added together, they just felt it wasn't financially responsible to go that much in debt every month. They tried to arrange special financing with their mortgage lender, and were told the lender was being inundated with requests and didn't have the financial means to refinance so many at a lower interest. they attempted to find another lender but weren't able to find one- there are fears the value of houses will continue to decline, perhaps significantly, even if temporarily. So, they weren't able to find any other options. Their lender foreclosed on their house.

They have moved into an apartment, and are admirably making the best of it. But now that friends have been effected by the ARM meltdown, it is much more real to me.

I hope the federal government and larger lenders are able to do much more than the steps they have already proposed. My friends put their blood, sweat and tears into that house. It could be argued that they should have had a better understanding of what they were signing, but their own experience was like tens of thousands of others. They were assured this was the best way to go, and they trusted their lender. It isn't realistic to expect everyone buying a house to become an expert on mortgage and home financing. they are responsible, but absolutely, so are the lenders, many of whom deliberately misled the home buyers.

I wish the best to my friends, and I hope we can find a way to stop this tragedy from becoming an epidemic.

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