Regarding the arguments about the percentage of exotic loans that are likely to get into trouble, I can suggest a paper that was published about half a year ago:
Some of you may be familiar with the paper or its author (Christopher Cagan, from First American Real Estate Solution). He has gathered pretty good data about exotic loans, and it’s all there in the paper.
He then proceeds to consider several scenarios (flat prices, down 10%, etc) and estimates how many people would be in trouble under each scenario. But, in my opinion, the best thing about the paper is that it provides the raw data, so a reader can make an analysis under different assumptions (for example, down 20%).
