What I suspect prompts people on this forum to defend these loans is not the fact that they think they’re reasonable in the vast majority of cases, but is instead your (Powayseller’s) constant use of hyperbole to make your point. Are the exotic loans that many people took out over the last couple of years going to be a problem for many of them? Sure. Is every single one of them going to result in a financial disaster for the borrower(s)? Of course not.

Now people can certainly disagree on the percentage of people that took out these loans who’ll end up being screwed, but you CAN’T say that ALL of them will be. (Of course, as you so aptly point out, you can say whatever you want — but that doesn’t mean anybody is going to take what you say seriously. Especially when your blanket statements are so patently ridiculous.) And, the disagreement about the percentage of people who’re going to end up screwed is probably something that we can’t resolve — I’m unaware of any data showing what percentage of exotic loans were taken out by people who really needed them to get into the house they purchased vs. those who could afford a traditional loan but instead chose a lower monthly payment. Common sense, and my perception of the American consumer, tells me that many of the people who took took exotic loans probably did so to get into a place they really couldn’t afford. However, experience with those around me is just the opposite — my friends who have taken such loans are on professional career paths that have pretty steep guaranteed salary increases. And, even some people I know who took out exotic loans in 2003 and 2004 that could have ended up being really hurt are already out of the market. All of this is to say that not EVERYONE who took out an exotic loan, or an ARM, is going to end up being financially ruined.