Dividends: Exploding Mortgages

Michael Shail, 36, of Rhinebeck, N.Y., faces a stunning financial shock next month. On Nov. 1, the interest rate on his $35,000 home mortgage will jump from 8.5% to 15%, and the monthly payment will go from $270 to $437. A computer-programming manager with IBM, Shail says that he will not have to sell his house, but he frets that he will be forced to reduce the amount of money that he is putting away for the college education of his four children.

Shail is one of 50 homeowners in upstate New York whose mortgages are now being called in for...

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