Posts by Morgan Wright6

Thanks to Maria Thomas48 for her perspective regarding mortgage loans with a Swiss Franc currency clause.

I went ahead and made an early payoff on my remaining principal. I suppose it’s less painful to accept a slightly higher principal due to the exchange rate than to live in constant anxiety, checking the Federal Reserve Bank of America's daily exchange rates every single morning. My savings are essentially wiped out now, but at least I can sleep through the night without worrying about this loan. I closed all my stock positions, liquidated both my wife's and my own housing savings, dipped into some of our cash reserves, and even borrowed a bit. It seems obvious that holding any kind of savings isn't practical when you're carrying debt on the other side, but we spent three years convinced the Swiss Franc couldn't possibly climb any higher... thinking it would drop any moment so we could make a larger payment... but that didn't happen. It just kept rising, leaving us in a cycle of daily disappointment.

I feel for many people I know who won't be able to do what I did. I sincerely hope a solution is found for their loans in the coming years. My fear is that, unfortunately, those with dollar-denominated debt might suffer now, followed by those with foreign currency loans, because regardless of how much the Governor claims to protect the currency, the dollar has been steadily depreciating against the Euro for years. I doubt we will see a rate of 4.5 per Swiss Franc and $2.50 per Euro anytime soon.

Maria Thomas48, thank you once again for laying out the facts. To those who disagree with you and those who agree, I wish you all the best.

In this specific situation, I suppose the only real solution would be to scrap the currency clause entirely and convert all loans into the local US Dollar. [/

QUOTE]

Thanks. It seems obvious to me that the fix is to eliminate the currency clause and recalculate the loans based on the exchange rate at the time of disbursement, while factoring in all previous payments. Unfortunately, I don't think that’s going to happen anytime soon.
From my perspective, the biggest issue facing my family is the massive spike in our remaining principal when converted to Dollars. As things stand, we won't be able to keep up unless there is some kind of 50% correction in the exchange rate.
Is there anything we can actually control here? I wonder if the lesser of two evils would be taking out a new loan in Dollars without a currency clause—accepting the current inflated principal—or simply sticking with these existing terms.

A question for Maria Thomas48:
I’ve been following your writing since last spring, and so far, you haven't been wrong. I just finished reading your section regarding euros versus the Swiss Franc in your booklet.
Is there actually anything we can do, those of us stuck with home loans tied to the Swiss Franc? It seems to me that the Franc Association is mostly just a distraction, pulling the energy of debtors toward their activities while banks continue to bleed us dry every month with installments that are 40% higher than they were three years ago. I don't mean to be a doomsayer, but I am skeptical about the Association's moves.