The New Mortgage Dynamics and the Anatomy of a Pay Option ARM Borrower. 850,000 Option ARMs Still Outstanding and 40 Percent in Distress. 4 Reasons to Walk Away from your Option ARM.
It is hard to believe that 13 percent of all mortgages are either in foreclosure or some other form of distress. This can stem from a missed payment from an unexpected job loss or mounting pressure of servicing current debt. To a large degree the allure of the option ARM product came from the ability […]
FDIC and the Bank Failures of First Federal Bank and Imperial Capital in California. Two Banks Brought Down by Option ARMs and Commercial Real Estate.
First Federal Bank of California failed on Friday because of a heavy over indulgence on risky option ARMs. Imperial Capital also failed on the same day because of an inability to raise capital and also mounting losses of commercial real estate loans. These two bank failures, two of the 140 in 2009, show that the […]
Housing’s Treacherous Path: From 44 Percent Homeownership to 70 Percent. The Levittown Dream and Nothing Down Madness. How a Nation lost its way with Homeownership.
It is a fascinating case study in the perceived power of homeownership that even after our economy was brought to its economic knees by a massive housing bubble that the government, Wall Street, home buyers, and sellers somehow view homeownership as our ticket to getting out of the financial mess. That is, the housing poison […]