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

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posted on Jul, 13 2009 @ 12:53 AM
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.

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.

posted on Jul, 13 2009 @ 01:33 AM
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.

posted on Jul, 13 2009 @ 04:29 AM
whoa this has potential to shake things up pretty bad


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