WSJ: UPDATE: Option-ARM Mortgages Turning Worse Than Subprime

Remember those Credit-Suisse charts where Subprime mortgage resets were to be followed by Option-ARM loans? Well, they're starting to reset. Extended mortgage pain for the banks and those derivatives.

online.wsj.com...

JULY 10, 2009, 4:20 P.M. ET
UPDATE: Option-ARM Mortgages Turning Worse Than Subprime

(Updates with companies declining to comment and further details in first, second, fourth and 13th paragraphs.)

NEW YORK (Dow Jones)--For the third straight month, option adjustable-rate mortgages are generating proportionally more delinquencies and foreclosures than subprime mortgages, the scourge of the housing crisis.

A further acceleration of troubles among the loans could mean higher-than-expected losses for Wells Fargo & Co. (WFC) and JPMorgan Chase & Co. (JPM), as well as the Federal Deposit Insurance Corp.'s own insurance fund.

"The realization of the issues related to option ARMs is just beginning," says Chris Marinac, director of research at Atlanta-based FIG Partners.
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I guess this kills the possible end of year recovery.

Well this isn't good I wonder if this will lead to a possible crash. It's like dominoes. All the bailouts did was keep these things afloat.

There needs to be some serious policy reform.

whoa this has potential to shake things up pretty bad