If you need one of these loans …

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.

Technorati Tags:

(Visited 11 times, 1 visits today)

1 Comment

  1. TrvlnMn February 3, 2006 at 00:08

    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.