Watch out for the Option-Pay ARMS that will be coming due in the next three years. Wachovia and WaMu were heavily into these, stay away from those banks. California and Florida were HUGE on these and are likely going to be last to recover from the mess that repealing Glass-Steagal began.
What they are: Loans where people have the option to pay a tiny amount that doesn't even cover the interest, Interest-only, or pay as if you have a 15 year or 30 year fixed rate. Of course, most pay the tiny amount. What they have been ignoring (that gorilla again) is the fact that after between 7 to 10 years, depending on the type you got, the options end and you pay the ARM prices, but they have gathered extra amounts because they chose the "tiny" option....
When they come due, some payments can actually triple if you haven't paid down any of your principal on the loan.
I hope nobody here was stupid enough to fall for this one.
What they are: Loans where people have the option to pay a tiny amount that doesn't even cover the interest, Interest-only, or pay as if you have a 15 year or 30 year fixed rate. Of course, most pay the tiny amount. What they have been ignoring (that gorilla again) is the fact that after between 7 to 10 years, depending on the type you got, the options end and you pay the ARM prices, but they have gathered extra amounts because they chose the "tiny" option....
When they come due, some payments can actually triple if you haven't paid down any of your principal on the loan.
I hope nobody here was stupid enough to fall for this one.