Two years ago, nearly $1 trillion worth of Adjustable Rate Mortgages were issued to new home buyers, featuring very low rates with no money down. Since this past summer, many of those same home owners have come to realize just how "adjustable" those mortgages could be. Cuyahoga Country treasurer Jim Rokakis says some of them spiked as much as 60%.
Jim Rokakis: Many of these folks didn't have the means to make payments at the higher indexed rate.
And so, homes were lost. The AFL-CIO survey says almost half of the adjustable rate mortgage holders don't understand how the adjustments work, and 73% don't have a clue as to how high their rate will go.
Leslie Tolf: There is a big disconnect between what people know, and what they think they know.
Leslie Tolf, who heads the union's benefits division, says they are aiming to close that gap with a confidential counseling hot line, to provide advice and information before homeowners get in over their heads. David C. Barnett, 90.3.