The percentage of Option ARM mortgages in California is sharply higher than the national average, reaching 25-30% in southern California. With these mortgages, you can choose how much to pay each month – until a trigger amount owed is reached, then the payments go much higher and stay there.
Click the BusinessWeek image to view full-sized. Scary, especially if you live in California.
Tip: Infectious Greed
With California being the 7th largest economy in the world, scary is the correct word. This though may only be the tip of the iceberg just hope the Federal Reserve is paying close attention so this thing won’t start to unravel to quickly. Does anyone remember 30% down, 20 years fixed and no prepayment penalty after the first year ?