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option arm mortgage crisis

Option ARM Defaults Expected to Surge 25%

by Moe Bedard

Twelve-month default rate expectations on certain U.S. RMBS collateral have doubled since the previous quarterly survey, with U.S. 2007 Alt-A pay option ARM RMBS collateral default rate predictions rising to 25% from 12% polled in Q3.

For the same vintage, U.S. prime fixed-rate collateral default forecasts rose to 5.75% from 4.00%; U.S. prime adjustable-rate collateral default [...]

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Option ARM Mortgages: Housing’s Posion Pill

by Moe Bedard

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 [...]

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Option Arm Hell on Mortgage Street Coming Soon!

by Moe Bedard

I have been warning about this crisis coming for the past two years. This will be nothing like we have ever seen and it will drive upscale housing into the ground over 2010-2011.
Can anyone say million dollar homes for 10-30 cents on the dollar? That is EXACTLY what is going to happen in Southern California.

http://loanworkout.org/2008/01/its-not-all-subprime-pay-option-arms-californias-billion-pound-gorilla/
http://www.businessweek.com/lifestyle/content/jun2008/bw2008065_526168_page_2.htm
Moe Bedard, [...]

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