Here’s a sign of changing times — not necessarily for the better. The WSJ reports that Option ARMs are now performing worse than subprime. From the WSJ article: For the third straight month, option adjustable-rate mortgages are generating proportionally more delinquencies and foreclosures than subprime mortgages, the scourge of the U.S. Option ARMs were typically […]

Megan McCardle and Ryan Avent have posts up about the coming recast of option ARM mortgages. Both contend that the issue isn’t the payment shock but some other factor or combination of factors that might make borrowers with option ARMs default. Here is Ryan’s analysis: Since the housing bust began, people have approached the problem […]

It looks like the day of reckoning for Option ARMs has been pushed out. Business Week cites a Credit Suisse study that says the wave of resets for Option ARMs which had been forecast to begin this year and accelerate through 2010 has probably been delayed by about a year. The reason? Low interest rates. […]