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Option Arms - 93% Pay Less than Interest     27-Nov-09 09:53 AM    
"NEW YORK (CNNMoney.com) -- Option-ARMs: File under, "It sounded good at the time."

These exotic mortgages allowed homebuyers to come to closing with little cash and choose, monthly, how much to pay: interest and principal, interest only, or a minimum amount less than the interest due.

Of course, the last option is the one 93% of option-ARM buyers selected, according to a new report released this week by Standard & Poors. "

http://money.cnn.com/2009/11/24/real_est...

combine that news with

http://www.housingmarketnews.net/images/...

and we are looking at some messy times ahead.
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satan_is_lov...

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Re: Option Arms - 93% Pay Less than Interest     27-Nov-09 11:35 AM    
You know I took this problem really seriously at one point.

Then I kind-of forgot about it.

Now I can see the danger again, but I am having difficulty expecting the same kind of .... consequences - is that what I am trying to say?

I think I must have some sort of "crisis fatigue" with US housing. I am finding it hard to give a $%^& even though intellectually I know this is very serious indeed.
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Declan B

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Re: Option Arms - 93% Pay Less than Interest     27-Nov-09 02:05 PM    
Yes I agree.

It doesn't help that the "crisis" is somewhat tempered by suspending all the old accounting rules.

Having said that.

These types of mortgages have been defaulting at 25% recently.. so that should still cause some massive bad debt writedowns.
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