The Top 10 Reasons You Can’t Refinance Your Option Arm Mortgage
1. The Option Arm Mortgage has a number of different names. It has been called the Option Arm Loan, Pick A Payment Loan, Neg Am Loan, and the Negative Amortization Mortgage. All of these names describe the same mortgage. All that really happened was that each mortgage company decided to change the wording of the loan so some sound better than others. Pick A Payment (wait, I can choose what payment I want to make) and Option Arm (we all like options) sound better than Negative Amortization Mortgage (nobody likes a negative Nancy). They all pretty much describe one of the worst loans ever invented and let me tell you why.
2. The Option Arm Mortgage came with a feature that let you have a choice on what payment you would like to make each month. You would get a 15 year fixed, 30 year fixed, Interest Only, and a Minimum payment. Every single month
Click here to continue readingThe Top 10 Reasons The Negative Amortization Mortgage Ruined The Mortgage Industry
1. The negative amortization mortgage was not the only reason but it did play a major role. At one time last year some major lenders like Countrywide had something like 8% of their mortgage portfolio in the State Of California were Negative Amortizing loans. As most of us know home prices in California are not cheap and to know that the 8% of the loans were in the billions of dollars its easy to see why Countrywide took a dump.
2. I don’t know what idiot or genius thought of this loan. The idiot that said lets give people the opportunity to pay less than the interest so the loan goes up in balance and you know what let’s give them the option to defer it up to 115% or even 125% of the value of the loan. The genius that said we can make a boat load of money making these loans
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