Unsustainable Mortgage Superstore Seems like pretty much the middle of the desert. This walmart has everything ­ supermaket, auto repairs, a photo development center. Even a home finance office is coming soon... Walmart is getting into the real estate banking business. Recently, much of the home purchasing frenzy has been funded by adjustable rate, interest-only home loans. A mortgage broker we interviewed told us that most recent loans in the Inland Empire have been low or no downpayment versions of these loans. She said that many people have started refinancing every month, just so that they can skip a payment. The cost of each refinance gets rolled into the priciple. Another broker explained that many home buyers don’t understand that their interest rates are not 1% for the life of the loans, but may actually be as high as 8 or 10% already and can get higher. These loans result in a phenomena called “negative amortization.” That means that you don’t get any equity on your house. The amount you owe every months actually increases, because your payment doesn’t cover the principle or even all the interest. Pretty soon you could owe more than your house is worth. These loans are usually given to people who have poor credit, high debt, or who can’t document a high enough income to cover a $500,000.00 or $700,000.00 house. These homebuyers might use their houses to finance new vehicles, good for long desert commutes to the work in the city, or furniture for their houses. That’s why so many people are predicted to lose their homes. These loans could be a new product offered at the Walmart Super Store.