Ok, now I've heard everything: "Exploding ARMs"

[Silverbird]

Ouch, when one of these go off!
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Exploding ARMs Roil Bernanke's Drive to Calm Markets (Update1)

By Bob Ivry and Jody Shenn

Feb. 7 (Bloomberg)
The estimated 1 million homeowners with $500 billion of option ARMs are beyond the help of interest-rate cuts by Federal Reserve Chairman Ben S. Bernanke. While subprime borrowers face an average increase of 8 percent or less when their adjustable-rate mortgages reset, option ARM homeowners may see their monthly payments double after their adjustments kick in.

``We call them neutron loans because they're like a neutron bomb,'' said Brock Davis, a broker with U.S. Express Mortgage Corp. in Las Vegas. ``Three years later the house is still there and the people are gone.'' http://www.bloomberg.com/apps/news?pid=20601109&sid=azjDaDjddBE8&refer=home

 

[Texarkandy]

“Joe Ripplinger took out a $184,000 mortgage in 2006…………

“……It allows him to write a check for $565 a month even though he owes $1,300…….”

Wow, What a deal!! Cheaper than rent! :nuts: And I bet that $565 includes both PI and TI !!



“……We're barely making it right now,'' Ripplinger said……”

“….We thought they were putting us on a 30-year fixed….”



Sounds to me like whoever loaned this guy $184K deserves to take a bath on the default - not get a bailout

Well, at least the feds are going to send him $1200+ this summer for a new plasma TV (or perhaps he should use .99 cents of it to BUY A CALCULATOR DUDE!!)