Sometimes you look at what people signed up for, and you wonder what they were thinking.
“The Martinezes bought their house in early 2005 for $630,000. It is now worth about $420,000. They have an interest-only mortgage, a popular loan during the boom that allows owners to forgo principal payments for a time.
“But these loans eventually become unmanageable. In 2015, Mr. Martinez said, his monthly payments will be $12,000 a month. He laughed and shook his head at the absurdity of it.”
The only way this would ever make sense is if you never expected to pay, as if you expected housing prices to continue to go up so fast they would bail you out. But how is it possible to have such an expectation? The phrase “nothing grows to the sky forever” isn’t a new saying.
The family also is “Burdened with credit card debt”.