One out of every five Americans no owes more on their home than it is worth, according to research involving JPMorgan Chase’s decision to temporarily halt foreclosures. While that certainly is good news for many, it is not good news for investors and banks. “Prime mortgages, especially where there are pay-option ARMs involved, (are) becoming a broader issue,” said Charles Scharf, head of retail financial services at JPMorgan.
And as bright outlooks go, the good news continues to roll in with news that credit card banks are considering a plan to forgive up to forty percent of credit card debt for some credit card holders. Remember, if you will, that the same credit card banks strongly giving Americans a “credit card bill of rights” so once again we wonder what their motive is.
As for JPMorgan’s Scharf, who would have ever thought that picking your own payment on an option Arm that increases the balance owed on a home was a good idea in the first place?
We also wonder about the fast drop in oil and gasoline prices. Was it a perfect storm? Failures, writeoffs, markdowns, gasoline over $4 a gallon, foreclosures, high food and energy prices, and now – all of a sudden – we see cheaper gasoline, and offer to forgive some credit card debt, and a temporary halt to foreclosures! What is going on?
Like a “pick your payment” option ARM, if it seems too good to be true, perhaps it is.