Thanks for the perspective. GoldenWest is an exotic loan leader, and although they issued ARMs in the 1990’s, suffered no losses in their portfolio. They credit this to strict underwriting, so their option ARMs are held by credit-worthy borrowers. I wondered why they weren’t affected adversely in the 90’s, and this explains it.

This time may be different. More homeowners are overextended. Wage inflation is not keeping up with rising interest rates in this economic cycle.