It’s Not All Subprime. Pay Option ARM’s - California’s Billion Pound Gorilla

What a headline huh? That's the heading in this article here.

Well it seems according to this article, and a great many more there's more trouble brewing on the US home loan market. So just when you thought you had heard it all, are we about too see the next round?

These are yet another type of loan where you can elect a lower start repayment, but then they ratchet up as the years go by.


In what looks like more pain for California, BusinessWeek reports that 25-30% of all pay option ARMs were made in California.
The most of any state.
Check out the above chart from BusinessWeek.

And this chart from an MSNBC.COM article with data from First American Core Logic shows when its probably going to happen.
Interesting next year will be.

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