[Kevomac]

I agree with the last few statements. If you really pay attention, ARMs aren't that bad. As several people said, if you know your income is going up (maybe you're finishing school), you're credit score is improving so that you can later refinance to a better fixed rate, or if you're for sure going to sell and move before the rate adjusts, then ARM's can be all right.

Part of the problem is ignorance on the part of the borrowers (or downright stupidity in some cases), but that doesn't make it all right for loan officers to be dishonest to take advantage of these people. Brokers have to be licensed, and something needs to be done to insure that they play by the rules. Right now, even when they get caught in outright fraud no one does anything about it. My wife caught a broker dirty dealing (he had an appraiser on payroll working for his company - so much for arms length transactions). but when she turned him in to HUD, they agreed that what he was doing was illegal, but unless the FBI thought it worth pursuing, nothing would be done. As far as I know he's still in business.

Besides, a certain prominent politician who's still in office, committed an unbelieveable fraud in the nineties, and most people don't even know about it. He and his brother owned an S&L in Colorado where they were making phony loans to phony borrowers, selling the loans to Fannie Mae, then pocketing the cash for themselves. When the RTC shut them down during the S&L scandal, it cost the taxpayers billions, and the boys walked away untouched and rich. I won't name the person for fear of starting a political fight, but some probably know who I'm talking about, and I know first hand witnesses from Fannie Mae who worked on the team that busted the scandal so I'm not just speculating. Anyway, I better quit before I get the thread closed.