Click on title link above for full LA Times article by E. Scott Reckard, Los Angeles Times Staff Writer
Joan Olsen, a retired welfare worker, fears she’ll join the ranks of the delinquent. She said she didn’t fully understand the loan terms when she refinanced her San Diego condominium 15 months ago with an option ARM. “I have no one but myself to blame for signing off on something I didn’t understand.”
Delinquencies among holders of risky option ARMs are increasing as their minimum payments climb.
Thought the mortgage meltdown was just a sub-prime affair? Think again. There's another time bomb waiting to explode, experts say: risky loans made to people with good credit.
So-called pay-option adjustable-rate mortgages, or option ARMs, were the easiest and most profitable home loans for lenders and brokers to make for much of this decade. Last year, they accounted for about 9% of the volume of all mortgages made in the U.S. and were especially popular in California, Florida and Nevada -- states where home prices rose the most during the housing boom and are now falling most sharply.
No comments:
Post a Comment