Comments on: Option ARMs and Recast Shock Syndrome: Toxic Financial Products are Imploding on Schedule. Examining the Impact on California. http://www.doctorhousingbubble.com/option-arms-and-recast-shock-syndrome-toxic-financial-products-are-imploding-on-schedule-examining-the-impact-on-california/ How I Learned to Love Southern California and Forget the Housing Bubble Thu, 18 Mar 2010 14:32:12 +0000 http://wordpress.org/?v=2.9.2 hourly 1 By: Dcdubbs http://www.doctorhousingbubble.com/option-arms-and-recast-shock-syndrome-toxic-financial-products-are-imploding-on-schedule-examining-the-impact-on-california/comment-page-1/#comment-43125 Dcdubbs Wed, 09 Dec 2009 23:01:13 +0000 http://www.doctorhousingbubble.com/?p=1354#comment-43125 It's sad, I used to work in the loan industry in Las Vegas. Naturally option arms were very popular in our neck of the woods. The customers loved them for the Minimum Payment and loan officers loved them for the 3 points in the back. When used responsibly, especially with interest rates as low as the are, the Option ARM can be better than a standard loan, however most people lack the discipline and keep checking the minimum payment box until the re-cast monster rears its ugly head. This site does a fairly good job of breaking down the option arm as well: http://www.bankapedia.com/mortgage-encyclopedia/faqs/534-how-does-an-option-arm-work- unfortunately like your article it won't get read by the people who need to read it. It’s sad, I used to work in the loan industry in Las Vegas. Naturally option arms were very popular in our neck of the woods. The customers loved them for the Minimum Payment and loan officers loved them for the 3 points in the back. When used responsibly, especially with interest rates as low as the are, the Option ARM can be better than a standard loan, however most people lack the discipline and keep checking the minimum payment box until the re-cast monster rears its ugly head.

This site does a fairly good job of breaking down the option arm as well:
http://www.bankapedia.com/mortgage-encyclopedia/faqs/534-how-does-an-option-arm-work-

unfortunately like your article it won’t get read by the people who need to read it.

]]> By: Angie http://www.doctorhousingbubble.com/option-arms-and-recast-shock-syndrome-toxic-financial-products-are-imploding-on-schedule-examining-the-impact-on-california/comment-page-1/#comment-36847 Angie Fri, 05 Jun 2009 20:04:01 +0000 http://www.doctorhousingbubble.com/?p=1354#comment-36847 When we moved to California from Arizona in 2004 we were in complete sticker shock. I asked the RE agent how anyone could afford a home here and he said with "creative financing" and when the time came for our payments to increase, all we had to do is put the home up for sale or refinance. He also said he had a report from a university's real estate department and real estate is going nothing but up and it would be a sound investment. Ha! My husband and I opted to rent but then began to see all the sale prices of the homes around us increasing to double their value -- we realized we had moved here just when the bubble was really gaining legs AND the prices of homes were crazy to begin with. I'm sure you hear stories like this all the time... but I'm really mad as hell that they were so many irresponsible people out there! When we moved to California from Arizona in 2004 we were in complete sticker shock. I asked the RE agent how anyone could afford a home here and he said with “creative financing” and when the time came for our payments to increase, all we had to do is put the home up for sale or refinance. He also said he had a report from a university’s real estate department and real estate is going nothing but up and it would be a sound investment. Ha! My husband and I opted to rent but then began to see all the sale prices of the homes around us increasing to double their value — we realized we had moved here just when the bubble was really gaining legs AND the prices of homes were crazy to begin with. I’m sure you hear stories like this all the time… but I’m really mad as hell that they were so many irresponsible people out there!

]]> By: Curiouser & Curiouser http://www.doctorhousingbubble.com/option-arms-and-recast-shock-syndrome-toxic-financial-products-are-imploding-on-schedule-examining-the-impact-on-california/comment-page-1/#comment-32267 Curiouser & Curiouser Fri, 06 Feb 2009 17:05:44 +0000 http://www.doctorhousingbubble.com/?p=1354#comment-32267 I think lightdemand has a great observation - we are way ahead of schedule for these loans to implode. Isn't this a good thing? Hasn't everyone been saying we need to rip off the band aid and get it over with? That the more the government meddles in this the longer it lasts? Well, so far the government has been ineffective and slow to create a program that may actually encourage people to catch the falling knives. The Subprime wave is almost over (except for the implosions from the "modified" loans) and the Opt-A wave is in hyperdrive. Americans are now hip to the fact that it is NOT a great idea to buy right now even with incentives. We may get through most of this before any government programs gain momentum. I think lightdemand has a great observation – we are way ahead of schedule for these loans to implode. Isn’t this a good thing? Hasn’t everyone been saying we need to rip off the band aid and get it over with? That the more the government meddles in this the longer it lasts? Well, so far the government has been ineffective and slow to create a program that may actually encourage people to catch the falling knives. The Subprime wave is almost over (except for the implosions from the “modified” loans) and the Opt-A wave is in hyperdrive. Americans are now hip to the fact that it is NOT a great idea to buy right now even with incentives. We may get through most of this before any government programs gain momentum.

]]> By: LA-Architect http://www.doctorhousingbubble.com/option-arms-and-recast-shock-syndrome-toxic-financial-products-are-imploding-on-schedule-examining-the-impact-on-california/comment-page-1/#comment-32261 LA-Architect Fri, 06 Feb 2009 16:03:18 +0000 http://www.doctorhousingbubble.com/?p=1354#comment-32261 O.k.... THAT IS SOOO UNFAIR!!!!! Why are the rest of us paying rent then??? O.k…. THAT IS SOOO UNFAIR!!!!!

Why are the rest of us paying rent then???

]]> By: Miami-Ick http://www.doctorhousingbubble.com/option-arms-and-recast-shock-syndrome-toxic-financial-products-are-imploding-on-schedule-examining-the-impact-on-california/comment-page-1/#comment-32233 Miami-Ick Fri, 06 Feb 2009 09:24:38 +0000 http://www.doctorhousingbubble.com/?p=1354#comment-32233 To Miami Beach RE Atty: Nothing personal, but compounding the problem in Miami is that people don't buy houses . They buy "units": hi-rise condos so that they can live like rates in a cage with a view of the other rats in their cages and the tacky people down below driving their Hummers to the Dollar Store. Condos are doubly ruined, since the associations implode when the few remaining owners can't pay the water bills. And financing will become increasingly difficult for rat cages - I mean condos. So it's a negative feedback loop. To Miami Beach RE Atty: Nothing personal, but compounding the problem in Miami is that people don’t buy houses . They buy “units”: hi-rise condos so that they can live like rates in a cage with a view of the other rats in their cages and the tacky people down below driving their Hummers to the Dollar Store. Condos are doubly ruined, since the associations implode when the few remaining owners can’t pay the water bills. And financing will become increasingly difficult for rat cages – I mean condos. So it’s a negative feedback loop.

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