The next mortgage bomb: Option ARMs
Bob Morris @ Aug 16th 2008 00:53 - Category: Credit crisis
First was subprime, Alt-A is about to explode, but the really nasty shrapnel could be from Option ARMS, as ClusterStock explains.
But when house prices are falling and refinancing is difficult, as is now the case, the option ARM is the financial equivalent of a bikini in winter. Homeowners end up owing more on a property that is worth less.
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