Strong ARMs are crushing borrowers

The Baltimore Sun reports:

Adjustable rate mortgages have always meant that homeowners are taking a chance that payments could fluctuate along with interest rates, but in recent years some loans have been structured to virtually guarantee that rates go up - and stay up.

While many homeowners are feeling the pinch of rates resetting on so-called ARMs, some are getting crushed by what housing advocates call "strangulation ARMs" that continue to reset as often as every six months.

The terms of those loans ensure that rates remain high - often into the double digits - and never fall below the initial rate.

The gift that keeps on giving.