We’ve been talking about the next wave of the mortgage crisis for quite some time now, and it seems that, as predicted, it’s cresting and about to hit. We are, of course, speaking of Option-ARM loans — considered the riskiest of all mortgages due to their ability to grow rather than shrink. Yes, there actually exists a mortgage that allows the borrower to pay less than the interest that is accruing on the loan.
James Dimon, the chairman and chief executive of JPMorgan Chase, is not optimistic about the mortgage market. He told investors that he expects the losses mortgages given to people with good or excellent credit to be “terrible.” According to the New York Times, “The first wave of Americans to default on their home mortgages appears to be cresting, but a second, far larger one is quickly building.” How can this be?
Steve Carrigan is in charge of economic development for Stockton. He says bank loans made it a party every day.