[quote=sdrealtor]I did not miss that point, I made an assumption that a very large percetnage of those liars have already walked once they were severely underwater.
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That’s what doesn’t make sense to me. 80% of option arms were low/no doc. 17% of option arms have already resulted in foreclosure. Even if all of that 17% was low/no doc, that still leaves 63% low/no doc loans still active. It seems to be a bit of a leap to assume that “liars” are mostly gone and the honest low/no doc borrowers are what’s left. Maybe its true, but I just haven’t seen any evidence to support it.
The interesting thing about option arms is that with a low teaser rate, it can actually be cheaper to “own” than to rent. However, if a recast happens and the monthly mortgage goes up by 40%, that equation can change pretty drastically. I’m wondering how many people are riding it out until the math no longer makes sense.
