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i_godzuki

Businessweek Cover Story On Toxic Mortgages

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http://www.businessweek.com/magazine/toc/0...000magazine.htm]

There was plenty more going on behind the scenes they didn't know about, either: that their broker was paid more to sell option ARMs than other mortgages; that their lender is allowed to claim the full monthly payment as revenue on its books even when borrowers choose to pay much less; that the loan's interest rates and up-front fees might not have been set by their bank but rather by a hedge fund; and that they'll soon be confronted with the choice of coughing up higher payments or coughing up their home. The option ARM is "like the neutron bomb," says George McCarthy, a housing economist at New York's Ford Foundation. "It's going to kill all the people but leave the houses standing."

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Guest Shedfish

Wow, even worse than IO. Can you believe it. Yes, (some) bankers are that sick.

..which his lender, Washington Mutual (WM ), gets to count on its books. WaMu, no fly-by-night operation, said it couldn't comment on Harold's case, citing confidentiality issues. A spokesman says the bank "accounts for its option ARM product in accordance with generally accepted accounting principles...

the elephant in the corner link. Just the 30 billion USD oversight...

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This is going to be the mother of all financial scandals this time next year! It may dwarf the problems created by endowment mortgages!

I wonder if we'll see these ARMs in the UK at some point? Where else are the lenders going to get the cash to cover their losses and to perpetuate the cycle? Good old financially stupid Englander!

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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