I was at a party about 13 months ago, a going away party for one of my clients whose house we had just sold. I had sold the hostess her house, and somehow or another we started talking about 80/20 loans — nothing down financing. She had just refinanced to retire the second mortgage, so she had 20% equity in her home at next-to-nothing in out-of-pocket costs.
All around the room, people started nodding and saying 80/20, 80/20. They had all done the same thing, a room full of young homeowners with their homeownership made possible by the no-PMI piggy-back loan.
Is Your Mortgage Choking You?
For an article in BW, I’m looking to interview people who have subprime ARM mortgages and are feeling squeezed by resets.
A few weeks ago, Coy admitted that margins of error in statistical reporting render much of it meaningless. I have never worked with a sub-prime borrower, but I would expect that, among the stories of people being “choked,” there must also be stories of people who bought homes they would not otherwise have been able to purchase, homes they have subsequently refinanced with conforming loans.
“Proof by anecdote” is bogus in the first place, since anecdotes abound (and they’re much easier than real estate to improve). But surely there are countervailing anecdotes for almost any phenomenon. This might seem to argue for presenting “both sides” of the story. To me, it suggests a better approach. An anecdote in a news article is almost always a fallacious Appeal to Emotion dressed up as testimony. With two or three sad tales, the reporter implies that a situation that might be quite rare is in fact ubiquitous — and that the “solution” propounded requires no rational defense. Facts are facts, and surely thoughtful people can digest them without all that saccharine. Why not leave the anecdotes out altogether…?