neg am ooption arm resets

[HLS]

My understanding is that the vast majority of NEG AM loans were not sliced and diced with the subprime ginsu knife.

Most are “portfolio” loans meaning that the lender kept them on their books along with the servicing rights.

In a 6% environment, some these loans were at 8%-9%+ representing a 35%-50% premium, AND the fact that there were accounting flaws which allowed them to “misplace” phantom income.

This may turn out to be the 500 year flood that people heard about, but didn’t think would occur in their lifetime.

I truly believe that we are witnessing history being made of a meltdown. It is going to affect the USA much worse than others.

Stocks trickle down slowly until they hit bottom. Houses will do the same.

[SD Realtor]

HLS I didn’t realize that the majority of them were portfolio loans. I still have this feeling that the lenders will not invoke the hatchet on these homeowners but ya never know right?

Actually if they did it would sure be nice and would definitely speed things up. I just don’t see it but that is your neck of the woods.

SD Realtor

[SD Realtor]

HLS I didn’t realize that the majority of them were portfolio loans. I still have this feeling that the lenders will not invoke the hatchet on these homeowners but ya never know right?

Actually if they did it would sure be nice and would definitely speed things up. I just don’t see it but that is your neck of the woods.

SD Realtor

[SD Realtor]

HLS I didn’t realize that the majority of them were portfolio loans. I still have this feeling that the lenders will not invoke the hatchet on these homeowners but ya never know right?

Actually if they did it would sure be nice and would definitely speed things up. I just don’t see it but that is your neck of the woods.

SD Realtor

[SD Realtor]

HLS I didn’t realize that the majority of them were portfolio loans. I still have this feeling that the lenders will not invoke the hatchet on these homeowners but ya never know right?

Actually if they did it would sure be nice and would definitely speed things up. I just don’t see it but that is your neck of the woods.

SD Realtor

[SD Realtor]

HLS I didn’t realize that the majority of them were portfolio loans. I still have this feeling that the lenders will not invoke the hatchet on these homeowners but ya never know right?

Actually if they did it would sure be nice and would definitely speed things up. I just don’t see it but that is your neck of the woods.

SD Realtor

[HLS]

These are IED’s on a balance sheet.. Better to leave them alone and hope that when they explode they might not hurt anyone….Ignore them and pretend that they don’t exist (until you have to)

Better for the lender to take a 110% loan and quietly adjust it to a 125% and delay the day of reckoning.
Why wake a sleeping giant ?

The REALLY sick part ?
Accrual accounting allows them to count as income the interest on neg am loans that is deferred and may NEVER be collected…

This will either create HUGE losses
OR
HUGE restatements
OR
Their demise

Nothing good can come from them in a declining market.

[HLS]

These are IED’s on a balance sheet.. Better to leave them alone and hope that when they explode they might not hurt anyone….Ignore them and pretend that they don’t exist (until you have to)

Better for the lender to take a 110% loan and quietly adjust it to a 125% and delay the day of reckoning.
Why wake a sleeping giant ?

The REALLY sick part ?
Accrual accounting allows them to count as income the interest on neg am loans that is deferred and may NEVER be collected…

This will either create HUGE losses
OR
HUGE restatements
OR
Their demise

Nothing good can come from them in a declining market.

[HLS]

These are IED’s on a balance sheet.. Better to leave them alone and hope that when they explode they might not hurt anyone….Ignore them and pretend that they don’t exist (until you have to)

Better for the lender to take a 110% loan and quietly adjust it to a 125% and delay the day of reckoning.
Why wake a sleeping giant ?

The REALLY sick part ?
Accrual accounting allows them to count as income the interest on neg am loans that is deferred and may NEVER be collected…

This will either create HUGE losses
OR
HUGE restatements
OR
Their demise

Nothing good can come from them in a declining market.

[HLS]

These are IED’s on a balance sheet.. Better to leave them alone and hope that when they explode they might not hurt anyone….Ignore them and pretend that they don’t exist (until you have to)

Better for the lender to take a 110% loan and quietly adjust it to a 125% and delay the day of reckoning.
Why wake a sleeping giant ?

The REALLY sick part ?
Accrual accounting allows them to count as income the interest on neg am loans that is deferred and may NEVER be collected…

This will either create HUGE losses
OR
HUGE restatements
OR
Their demise

Nothing good can come from them in a declining market.

[HLS]

These are IED’s on a balance sheet.. Better to leave them alone and hope that when they explode they might not hurt anyone….Ignore them and pretend that they don’t exist (until you have to)

Better for the lender to take a 110% loan and quietly adjust it to a 125% and delay the day of reckoning.
Why wake a sleeping giant ?

The REALLY sick part ?
Accrual accounting allows them to count as income the interest on neg am loans that is deferred and may NEVER be collected…

This will either create HUGE losses
OR
HUGE restatements
OR
Their demise

Nothing good can come from them in a declining market.

[34f3f3f]

Apparently, large chunks of Option ARMs have been repackaged and sold on, supposedly insulating banks, but the remainder on banks books, which as stated above is artificially inflating profits is unpaid interest. What happens when that interest is never paid? Aren’t you going to see a lot of restated profits (losses)? No doubt banks will find a way to camouflage these losses. Seems interest isn’t the only thing that’s going to be deferred.

[34f3f3f]

Apparently, large chunks of Option ARMs have been repackaged and sold on, supposedly insulating banks, but the remainder on banks books, which as stated above is artificially inflating profits is unpaid interest. What happens when that interest is never paid? Aren’t you going to see a lot of restated profits (losses)? No doubt banks will find a way to camouflage these losses. Seems interest isn’t the only thing that’s going to be deferred.

[34f3f3f]

Apparently, large chunks of Option ARMs have been repackaged and sold on, supposedly insulating banks, but the remainder on banks books, which as stated above is artificially inflating profits is unpaid interest. What happens when that interest is never paid? Aren’t you going to see a lot of restated profits (losses)? No doubt banks will find a way to camouflage these losses. Seems interest isn’t the only thing that’s going to be deferred.

[34f3f3f]

Apparently, large chunks of Option ARMs have been repackaged and sold on, supposedly insulating banks, but the remainder on banks books, which as stated above is artificially inflating profits is unpaid interest. What happens when that interest is never paid? Aren’t you going to see a lot of restated profits (losses)? No doubt banks will find a way to camouflage these losses. Seems interest isn’t the only thing that’s going to be deferred.

[Author]

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