The coming US dollar crisis Message Board

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Strategies & Market Trends : The coming US dollar crisis

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To: ggersh who wrote (26717)	1/31/2010 7:02:00 AM
From: DebtBomb	1 Recommendation Read Replies (1) of 71463

KABOOOOOOOM First, you’ll notice that the subprime market will keep on having problems up until 2009. But an interesting new wave emerges with this new data. Now we are seeing a growth in Option adjustable mortgages; that is, mortgages where you can pay even less and have your mortgage balance grow! So clearly if you can put 2 and 2 together, many people refinanced out of toxic subprime mortgages (if they could) into option mortgages and all those late comers to the housing party substituted subprime loans for option mortgages. Jumping from one frying pan to another! An option mortgage is just as bad as a subprime loan, possibly even worse. First, these loans give you various payment options. At the bare minimum, you have the ability to pay less than the interest on the loan. How can that be? Well, any interest is simply tacked onto your balance so when your mortgage fully amortizes, you will have a larger mortgage. Call it mortgage appreciation. It is another wonder of the financial engineering that we are now living through. As you can see from the chart above, this wave doesn’t fully expand until 2010 through 2012. doctorhousingbubble.com

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