voa economic report - Homeowners Struggle With Rising Loan Rates, Falling House Prices

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is the VOA Special English Economics Report. In the few years, many Americans have bought houses with ARMs: mortgages. These loans usually begin with lower interest rates the first two or three years than fixed-rate mortgages. the rate changes as major interest rates rise or . Holders could be surprised by their new, larger monthly as their loans reset to a higher rate. Some may not even know they have adjustable-rate mortgages. Some and brokers who found loans for people are accused misleading borrowers. Yet borrowers often did not even have show proof of earnings. Now, many people who took adjustable-rate mortgages may not be able to make their . And not only holders of risky subprime loans; even with better credit histories could lose their homes. Next , the Federal Reserve in Washington is expected to cut target rate for short-term loans between banks. But long-term are the ones that affect things like housing loans, these have been rising. Investors have been demanding higher in exchange for the risk of keeping money in securities. Federal Reserve records show that homebuyers currently hold hundred fifty billion dollars in subprime adjustable-rate mortgages. The Center for Responsible Lending points to numbers from UBS Research. These show that two hundred twelve billion dollars subprime ARMs will reset to a higher rate this . Over one hundred seventy billion dollars in loans will next year. The Center for Responsible Lending says subprime are the ones having the most trouble right now. in five of them who received their loans in last two years could lose their home. Some homeowners to refinance their loans to avoid higher payments. But is a bad time in the housing market. Falling prices could make it difficult to refinance. This is especially for buyers who were permitted to use little no money of their own to buy their house. weeks ago, President Bush announced some steps to help avoid losing their homes while faced with rising payments. last Friday there was more bad news: the economy four thousand jobs last month. It was the first employers have cut jobs in four years. And that's VOA Special English Economics Report, written by Mario Ritter. Steve Ember.

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