mortgages in Brazil

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michaelbush

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This is a very interesting story about mortgages in Brazil, I am not referring to the stock recommendation but about the changes in the Brazilian laws about repossessions ..

Mad Money: Brazil's House Party - Mad Cap Recap - MSNBC.com
Very interesting article Rob. Unfortunately the mortgage system here is not as simple as in Europe. It would seem that they use the lack of education or mathematical skills of the majority to cheat them. First they charge a high rate of interest and calculate you monthly repayments. So far OK - you think you know what you need to find each month for the next 5-10 years. WRONG!! The banks are not content with that, they then increase your monthly repayments in line with an index called TR or Poupança. This can result in repayments increasing around 6% per year until in the fifth year you could be paying 30% more for your loan than when it started. My negotiations came to an abrubt halt when I pointed out that this was unfair!!
 
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robh

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Very interesting article Rob. Unfortunately the mortgage system here is not as simple as in Europe. It would seem that they use the lack of education or mathematical skills of the majority to cheat them. First they charge a high rate of interest and calculate you monthly repayments. So far OK - you think you know what you need to find each month for the next 5-10 years. WRONG!! The banks are not content with that, they then increase your monthly repayments in line with an index called TR or Poupança. This can result in repayments increasing around 6% per year until in the fifth year you could be paying 30% more for your loan than when it started. My negotiations came to an abrubt halt when I pointed out that this was unfair!!
Hi Michael,

I am aware of the way the banks work in Brazil and I am aware of how your negotiations went as you told me :).

The significance of the story is that one of biggest problems that hinders the growth of most third world countries is the lack of any mechanisms to recover bad debts thereby stifling the flow of capital. This is a big step in changing that and a step in the right direction.

Regards,
Rob.
 
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ady1231

New Member
Very interesting article Rob. Unfortunately the mortgage system here is not as simple as in Europe. It would seem that they use the lack of education or mathematical skills of the majority to cheat them. First they charge a high rate of interest and calculate you monthly repayments. So far OK - you think you know what you need to find each month for the next 5-10 years. WRONG!! The banks are not content with that, they then increase your monthly repayments in line with an index called TR or Poupança. This can result in repayments increasing around 6% per year until in the fifth year you could be paying 30% more for your loan than when it started. My negotiations came to an abrubt halt when I pointed out that this was unfair!!
Graet advice mike!

Cheers
 
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