By Moe Bedard and Aaron Krowne
Let’s get something straight. Subprime loans are not the only thing that we need to worry about in this housing and mortgage crisis. It’s the hidden mortgage creatures in the “adjustable rate forest of the unknown” that are watching and waiting as they mature into full grown animals that we need to be concerned about.
Subprime’s red-headed cousin, the Alt-A mortgage product known as the “Pay Option ARM” (adjustable rate mortgage), hasn’t yet fully reared it’s ugly head. But let me tell you all something ladies and gentlemen, that head is mighty ugly and it might very well cause California to fall in to the Pacific Ocean and turn our Governor back into the Terminator to fight these evil mortgage animals that will wreak havoc on the Golden State in the coming years.
Pay Option ARMs common euphemistic names and AKAs;
- WAMU - Option ARM
- World Savings/Wachovia - “Pick-a-Payment”
- Indymac - “Flex Pay”
- “Cash Flow ARM”
What fun, creative names to describe such an ugly and toxic mortgage product. Read the rest of this entry »