If you need one of these loans …

Posted on February 2, 2006 by Jim Duncan

You need to reevaluate your options.

Option ARMs – not so good. (Be aware that the URL has a bad word.)

If these are not a recipe for disaster for the borrowers, the lenders and investors …

Not only are people getting option-ARM’s, 80% aren’t even fully documenting their income! Does anybody else see a problem here?!?!?

I don’t have experience with these loans in the Central Virginia market; my clients tend to choose more conservative loan options, but they scare me.

And this from the referenced WSJ article -

Investors are blithely ignoring the inevitable problems these banks will endure with their option-ARM customers. Just yesterday, mortgage giant Countrywide Financial Corp., another seller of option ARMs, reported rising delinquencies.

Those with cash should bide their time; foreclosures in market with high percentages of these loans will rise.

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About Jim Duncan

A Charlottesville Realtor who tries to stay on the bleeding/cutting/functional edge of technology and real estate trends. I have been selling real estate for the past 10 years, lived in C'Ville for twenty+ and am married to one of few Charlottesville natives left.
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  • TrvlnMn

    Jim wrote:

    Those with cash should bide their time; foreclosures in market with high percentages of these loans will rise.

    At which time I hope to be in a better position, so that I can take advantage of the drastic re-adjustment of the Las Vegas housing market. They’ve got a lot of those sketchy mortgage deals.

    And let us not forget those “interest only” loans where one isn’t even paying the principal for the first 5 or so years.

    I’m predicting these will be signifigant contributors to the deflation of the real estate bubble.

    Of course then what do I really know.