http://online.wsj.com/article/SB119318489086669202.html?mod=googlenews_wsj

Subprime mortgages aren't the only challenge facing Countrywide Financial (http://online.wsj.com/quotes/main.html?type=djn&symbol=cfc) Corp., the nation's biggest home-mortgage lender. Some loans classified as prime when they were originated are now going bad at a rapid pace.

These loans are known as option adjustable-rate mortgages, or option ARMs. They typically have low introductory rates and allow minimal payments in the early years of the mortgage. Multiple payment choices include a minimum payment that covers none of the principal and only part of the interest normally due. If borrowers choose that minimum payment, their loan balances grow -- a phenomenon known as "negative amortization."


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buncha asshats buying shit they can't afford... just more expensive than subprime.

You won't be seeing many H2 Hummers or Escalades with dealer plates and 24's in Temecula . You may be seeing a lot of them in the "used car" section, along with more repo signs than you already have. People were living this pipe dream that was bound to catch up to them. When I was looking to buy the condo in july of 06, I was offered all these crazy loan option. I opted for a 6.9% fixed for 30 years. I could've gotten as low as the 4's with all kinds of other shit. I ended up backing out anyway, and thank god I did. My loan wouldn't be fucking me, but the 100k in value that I would've lost in a year would..,....

yup, said it a couple of years ago when i first heard of these types of loans.