71% not paying full interest

[Coronita]

These are not subprime"

Nope, they sure weren't. They were, however, affordability tools to people who had no prayer of affording the house they bought. The "option" they wanted was to live in a larger house.

It is mind boggling to me that 71% of option-ARM borrowers are negatively amortizing their loans in the face of declining home values. There is only one way for that to end, and I suspect it will come when they hit their loan-to-value caps.

 
This isn't a surprise. When I attended a financial "investment" group that consisted of members with non-financial background (technicians,etc) at a "investment seminar" group in Clairemont, with the exception of my wife and I, every person who purchased a home touted Countrywide's loan as being the "most flexible". Some said quote: "if I run out of money this month, I just use the loan's "flexibility" and make a minimum payment on it. I've done this for a couple of months already.

Ironic, some were trying to get me to refinance out of 30year fixed into an option arm loan.

 

[img_assist|nid=5962|title=selfportrait|desc=|link=node|align=left|width=100|height=80]

—– Sour grapes for everyone!

[DWCAP]

I didnt think about this last night, too tired. It hit me this morning.

“As of the end of December, Countrywide had nearly $29 billion in pay-option loans, with about $26 billion of the total having grown beyond their original loan amount, the company said in a filing late Friday with the Securities and Exchange Commission.”

Perhaps I am doing my math incorrectly, but doesnt 71% not even paying the interest not jive with the above. How in the world, are only 71% neg-aming when ~90% of the total value is higher than the original loans? Either they are not counting those that are defaulting, or the smallest loans are doing ok, and everyone else is falling off a cliff. Am I missing something? Doing my math wrong? I was up way to late last night and just have to suspect me not getting it.
I wonder what those loan to value ratios look like now with todays appraisals.

[DWCAP]

I didnt think about this last night, too tired. It hit me this morning.

“As of the end of December, Countrywide had nearly $29 billion in pay-option loans, with about $26 billion of the total having grown beyond their original loan amount, the company said in a filing late Friday with the Securities and Exchange Commission.”

Perhaps I am doing my math incorrectly, but doesnt 71% not even paying the interest not jive with the above. How in the world, are only 71% neg-aming when ~90% of the total value is higher than the original loans? Either they are not counting those that are defaulting, or the smallest loans are doing ok, and everyone else is falling off a cliff. Am I missing something? Doing my math wrong? I was up way to late last night and just have to suspect me not getting it.
I wonder what those loan to value ratios look like now with todays appraisals.

[DWCAP]

I didnt think about this last night, too tired. It hit me this morning.

“As of the end of December, Countrywide had nearly $29 billion in pay-option loans, with about $26 billion of the total having grown beyond their original loan amount, the company said in a filing late Friday with the Securities and Exchange Commission.”

Perhaps I am doing my math incorrectly, but doesnt 71% not even paying the interest not jive with the above. How in the world, are only 71% neg-aming when ~90% of the total value is higher than the original loans? Either they are not counting those that are defaulting, or the smallest loans are doing ok, and everyone else is falling off a cliff. Am I missing something? Doing my math wrong? I was up way to late last night and just have to suspect me not getting it.
I wonder what those loan to value ratios look like now with todays appraisals.

[DWCAP]

I didnt think about this last night, too tired. It hit me this morning.

“As of the end of December, Countrywide had nearly $29 billion in pay-option loans, with about $26 billion of the total having grown beyond their original loan amount, the company said in a filing late Friday with the Securities and Exchange Commission.”

Perhaps I am doing my math incorrectly, but doesnt 71% not even paying the interest not jive with the above. How in the world, are only 71% neg-aming when ~90% of the total value is higher than the original loans? Either they are not counting those that are defaulting, or the smallest loans are doing ok, and everyone else is falling off a cliff. Am I missing something? Doing my math wrong? I was up way to late last night and just have to suspect me not getting it.
I wonder what those loan to value ratios look like now with todays appraisals.

[DWCAP]

I didnt think about this last night, too tired. It hit me this morning.

“As of the end of December, Countrywide had nearly $29 billion in pay-option loans, with about $26 billion of the total having grown beyond their original loan amount, the company said in a filing late Friday with the Securities and Exchange Commission.”

Perhaps I am doing my math incorrectly, but doesnt 71% not even paying the interest not jive with the above. How in the world, are only 71% neg-aming when ~90% of the total value is higher than the original loans? Either they are not counting those that are defaulting, or the smallest loans are doing ok, and everyone else is falling off a cliff. Am I missing something? Doing my math wrong? I was up way to late last night and just have to suspect me not getting it.
I wonder what those loan to value ratios look like now with todays appraisals.

[SDEngineer]

71% of the borrowers are NEVER paying more than the minimum. I’d bet money another 20% on top of that are sometimes paying the minimum (and probably topping out at paying the IO payment – I doubt very many on the option-ARM plan are paying any of the amortized payments).

[SDEngineer]

71% of the borrowers are NEVER paying more than the minimum. I’d bet money another 20% on top of that are sometimes paying the minimum (and probably topping out at paying the IO payment – I doubt very many on the option-ARM plan are paying any of the amortized payments).

[SDEngineer]

71% of the borrowers are NEVER paying more than the minimum. I’d bet money another 20% on top of that are sometimes paying the minimum (and probably topping out at paying the IO payment – I doubt very many on the option-ARM plan are paying any of the amortized payments).

[SDEngineer]

71% of the borrowers are NEVER paying more than the minimum. I’d bet money another 20% on top of that are sometimes paying the minimum (and probably topping out at paying the IO payment – I doubt very many on the option-ARM plan are paying any of the amortized payments).

[SDEngineer]

71% of the borrowers are NEVER paying more than the minimum. I’d bet money another 20% on top of that are sometimes paying the minimum (and probably topping out at paying the IO payment – I doubt very many on the option-ARM plan are paying any of the amortized payments).

[robson]

“As of the end of December, 71 percent of borrowers with pay-option loans were electing to make less than full interest payments.”

I read this to mean that IN DECEMBER, 71% didn’t pay the whole monthly payment. I believe SDEngineer is on the right track, with the subtle difference that the 71% isn’t necessarily repeat offenders, but just a 1 month instance.

The remaining 20% would be people who missed a payment in an earlier month but paid in December. Of course, I would hands down presume that the majority of the 71% who didn’t pay in December are probably repeat offenders.

[robson]

“As of the end of December, 71 percent of borrowers with pay-option loans were electing to make less than full interest payments.”

I read this to mean that IN DECEMBER, 71% didn’t pay the whole monthly payment. I believe SDEngineer is on the right track, with the subtle difference that the 71% isn’t necessarily repeat offenders, but just a 1 month instance.

The remaining 20% would be people who missed a payment in an earlier month but paid in December. Of course, I would hands down presume that the majority of the 71% who didn’t pay in December are probably repeat offenders.

[robson]

“As of the end of December, 71 percent of borrowers with pay-option loans were electing to make less than full interest payments.”

I read this to mean that IN DECEMBER, 71% didn’t pay the whole monthly payment. I believe SDEngineer is on the right track, with the subtle difference that the 71% isn’t necessarily repeat offenders, but just a 1 month instance.

The remaining 20% would be people who missed a payment in an earlier month but paid in December. Of course, I would hands down presume that the majority of the 71% who didn’t pay in December are probably repeat offenders.

[robson]

“As of the end of December, 71 percent of borrowers with pay-option loans were electing to make less than full interest payments.”

I read this to mean that IN DECEMBER, 71% didn’t pay the whole monthly payment. I believe SDEngineer is on the right track, with the subtle difference that the 71% isn’t necessarily repeat offenders, but just a 1 month instance.

The remaining 20% would be people who missed a payment in an earlier month but paid in December. Of course, I would hands down presume that the majority of the 71% who didn’t pay in December are probably repeat offenders.

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