{"id":3804,"date":"2008-08-07T20:03:37","date_gmt":"2008-08-08T03:03:37","guid":{"rendered":"http:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/?p=3804"},"modified":"2008-08-07T20:03:37","modified_gmt":"2008-08-08T03:03:37","slug":"sleazy-option-arm-advertisements","status":"publish","type":"post","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/3804\/sleazy-option-arm-advertisements\/","title":{"rendered":"Sleazy Option ARM Advertisements"},"content":{"rendered":"

I wrote this article on Active Rain<\/a>, about two months ago.\u00a0 It’s got legs in the comments’ thread over there.\u00a0 You’ll see that the REAL reason I’m worked up is that the “new sleazy option ARM advertisement” is to claim that you KNEW it was bad for the customer. The opposite is actually true
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I’m pretty high-touch with my neg-am borrowers.\u00a0 I keep in close contact with them quarterly.\u00a0 I just received notice that one of them had a notice of default filed against them for non-payment.\u00a0 The borrower lost his job and elected to use the “side account” he established, from the monthly cash-flow savings, to rent a new home rather than to “feed the depreciating asset” (his words).<\/em><\/p>\n

Before you comment on the article, you might read all of Dan Green’s “Mortgage Planning<\/a>” articles.\u00a0 if you haven’t the time to read all of them, read:<\/em><\/p>\n

If Low Downpayments Are More Risky To Banks, They Must Be More Safe For Home Buyers<\/strong><\/a><\/p>\n

I’d argue the same logic applies for negative-amortization (rising mortgage balances).<\/em><\/p>\n

Here’s the article:<\/em><\/p>\n

Remember the “sleazy Option ARM advertisements<\/a>“?<\/p>\n

They’re back but with a whole new twist<\/a>:<\/p>\n

This is why I never did option arms.\u00a0 This is part of the reason why we are in the housing mess we are in.\u00a0 Yes, borrowers have to claim responsibility, but every Bank that pushed neg am as a financing alternative deserves the billions in write downs and losses in stock options that they are mired in.\u00a0 I have no sympathy for them…only contempt!<\/em><\/p>\n

Oh, brother! <\/strong>If I see one more loan hack Monday morning quarterbacking this mess I’m gonna puke.\u00a0 There is nothing wrong with negative amortization loans; there was something drastically wrong with the way they were prescribed<\/a>.\u00a0 The “new neg-am” advertisements are “posited indignation” and they’re just as sleazy as the original advertisements.\u00a0 They prey upon the opposite of the greed motivation; fear.\u00a0 That ain’t helping anybody!<\/p>\n

Let me try to break down the negative amortization loan for you:<\/strong><\/p>\n