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In the past year, we've all gotten a crash course in housing, mortgages, banking, and everything that can go wrong in all of these areas. Blame for the current housing crisis lies on just about everyone involved: buyers who took out mortgages they couldn't pay back, banks that encouraged buyers to take out too-large mortgages and that hid crucial details in small print, seller and brokers who encouraged illegal cash-back purchases, investors who traded on mortgage securities, bank regulators who turned a blind eye to lending practices, etc. etc. One would think that by now, as more and more homes go into foreclosure, as thousands of investors lose millions of dollars, and as potential home owners with good credit find it difficult to get a mortgage, everyone who is to blame would be scurrying to clean up their acts. But judging from a letter that came yesterday from my bank (unnamed, as I assume other banks are equally guilty," these hopes of collective teshuvah might be optimistic. Dear Jill, Take a look around. There are too many fast talking, "where did that charge come from?" mortgages out there. . . We believe you have the right to a mortgage that fits your needs and isn't filled with surprises. . . [our] mortgage has a low fixed rate and payment for the first 5 years. Then, based on market conditions, we'll let you know if your rate is going up, down or staying the same. Everybody's reality is different, so make sure you choose the mortgage that's best for you.
In other words-- "unlike those mean old banks trying to sell you a thirty year fixed-rate mortgage, in which you'll have to pay the same interest rate every year, we'll make a brand new rate just for you every single year after the fifth." Or--in other words--"Don't expect to be able to afford your mortgage six years from now." Anyone who's been awake for the past six months will remember that adjustable-rate mortgages played a pivotal role in getting us into this mess in the first place. In an almost amusing twist on the news, my bank suggests that it's the fixed rate mortgages that have confused consumers, and generously has pre-approved me for a kinder, gentler, adjustable-rate mortgage. In halakhic terms, we call this g'neivat da'at--literally, mind theft, or deception--the idea being that the category of theft isn't limited to physically taking money or objects from another person, but can also include reducing a person's capacity for rational judgment by, for example, casting good mortgages as "fast talking" and potentially unsustainable ones as "best for you."
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