tag:blogger.com,1999:blog-1864815735750729117.post2653098797216212399..comments2023-10-31T06:28:56.237-07:00Comments on The Housing Chronicles Blog: 60 Minutes covers upcoming Alt-A and Option ARM foreclosure wavePatrick Duffyhttp://www.blogger.com/profile/01418865588511944900noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-1864815735750729117.post-50737125309862903312009-07-03T17:30:39.917-07:002009-07-03T17:30:39.917-07:00They also seemed to gloss over the main problem wi...They also seemed to gloss over the main problem with the option-arm loans as I understand it. The big problem is not that the interest rates recast after 5 years, it's that the entire loan recasts. <br /><br />The teaser rate going up is a small portion of the real issue. The recast means that the loan changes from an interest only or negatively amortized loan to a fully amortized loan at a legitimate rate for the remaining 25 years so the lowering of the interest rate will do nothing for these people--especially if the borrower paid the minimum payment on a negatively amortized option-arm for the first five years. Those who did, have a larger principle than they originally borrowed on a house that's worth half as much as they payed for it.<br /><br />That's the way I understand it, at least. Maybe I'm ill informed, but I don't believe I am.8n0u7noreply@blogger.comtag:blogger.com,1999:blog-1864815735750729117.post-37415714652925229332008-12-15T07:13:00.000-08:002008-12-15T07:13:00.000-08:00CBS missed a very important fact. An NASE Survey a...CBS missed a very important fact. An NASE Survey at www.nase.org , found that 3.7 million small business owners are part of this Toxic mortgage problem. They were targeted for ALT-A and Option ARMs. In fact, by mid-November 1.3 million have already missed 1-3 or more payments, and this is before the RESETS due to begin in 2009. The key to a solution is getting to these small business owners. Remember, these businesses employ 1-10 employees. If they fail, we have a major problem with job losses.Anonymousnoreply@blogger.com