These option ARM's,timebombs

ess0two

These were touted as well and truly killing everything off,what became of them?or when will they hit home?

Looks like a near miss at the mo,or perhaps failed to hit the target.

Any more graphs to reiterate their impact:rolleyes:

mbga9pgf

Oh, they are blowing up big style in the US. Some very creative accounting going on to keep stuff off balance, all done in slow time. The figures wells fargo put out the other day stressed that they are still expecting BIG writedowns from option arm, currently and in the near future.

Option ARMS
Some types of mortgage loans, like pay option ARMs, present unique challenges. The goal of HAMP is to reduce monthly payments to manageable levels, and place troubled borrowers into amortizing, fixed rate mortgages. Where borrowers on an option ARM are already having trouble paying the introductory low teaser rates - the relatively short initial fixed-rate periods when the option ARM bears an interest rate that is substantially below the "fully indexed" rate - it may be difficult to reduce the monthly payment and modify into an amortizing fixed rate loan. Despite these challenges, our current program permits borrowers with pay-option ARMs to use HAMP when they meet other eligibility criteria. In fact, the COP report showed that some borrowers with adjustable rate mortgages are getting modifications under HAMP.

Written by treasury secretary allison. Going to get even more interesting when the stimulus and bailout cash runs out in the US.

purch

These were touted as well and truly killing everything off,what became of them?

Of course, the dire predictions were well overblown, that is the way with Internet bloggers, they think the only way to get noticed is to over exaggerate everything.

But, we should remember the Housing market in the U.S.A. is totally different to the market in the U.K., and it is clear that a lot of the pain in their Mortgage market has only been been postponed, rather than solved.

When the shock finally hits, we must hope that the Banking sector, and the economy as a whole has recovered somewhat, because the shock still has the potential to do real damage to the U.S. economy.

Wookster

purch wrote: »

Of course, the dire predictions were well overblown, that is the way with Internet bloggers, they think the only way to get noticed is to over exaggerate everything.

But, we should remember the Housing market in the U.S.A. is totally different to the market in the U.K., and it is clear that a lot of the pain in their Mortgage market has only been been postponed, rather than solved.

When the shock finally hits, we must hope that the Banking sector, and the economy as a whole has recovered somewhat, because the shock still has the potential to do real damage to the U.S. economy.

I remember reading that 1 in 10 mortgages in the US is in arrears.

Wouldn't you call that potentially catastrophic?

purch

You know I don't use words like that

But it could be described as, not a very positive scenario :eek:

Wookster

purch wrote: »

But it could be described as, not a very positive scenario :eek:

Hah that is English tact at its best.

Perhaps I should take lessons

mbga9pgf

60% of option arm are in 3 months more arrears, or are already in default. Thats pretty dire. They werent spread out either, Nevada, California and Florida all had pretty big concentrations of these and they were classed as prime paper. Much of this RMBS paper will be residing on the governments books under its insurance scheme.

Great hey?

System

Someone let me know when it goes off, wouldn't want to not notice

Heyman_2

Just keep an eye on mbga9pgf and Wookster's posts, they're both obsessed with doom !!!!!! so I'm sure one of them will let us all know.

Personally, I'm writing this from my bunker at the end of the garden, just in case.

chucky

Heyman wrote: »

Just keep an eye on mbga9pgf and Wookster's posts, they're both obsessed with doom !!!!!! so I'm sure one of them will let us all know.

Personally, I'm writing this from my bunker at the end of the garden, just in case.

:rotfl::rotfl::rotfl:

ess0two wrote: »

These were touted as well and truly killing everything off,what became of them?or when will they hit home?

Looks like a near miss at the mo,or perhaps failed to hit the target.

Any more graphs to reiterate their impact:rolleyes:

can someone let me know when this thing goes off please!?!?
it's been ticking for ages now and nothing is happening

the_ash_and_the_oak

chucky wrote: »

:rotfl::rotfl::rotfl:



can someone let me know when this thing goes off please!?!?
it's been ticking for ages now and nothing is happening

don't know much about these tbh but I thought they weren't due for a couple of years yet?