Outdated is an interesting adjective. The long-term mortgages, which began as a Depression-era remedy to keep Americans in their homes in the 30's, serve the same purpose today. Many Americans, probably a lot more than will ever be officially recognized, cannot afford short maturity mortgages. Simply put, many Americans cannot afford to be home owners. It's all about affording the payment. Paying off the loan, as suggested by the increasing number of strategic defaults (walk-a-ways), is secondary.
The long-term mortgage, which began as a Depression-era remedy to keep Americans in their homes, may be out of step, given the current housing crisis.
Could it be time to say good-bye to the popular 30-year mortgage?
"The 30-year mortgage is outdated, the standard fixed-rate mortgage is outdated, and it has to be improved," housing expert Robert J. Shiller told CNBC.
Source:
finance.yahoo.com
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