The Complete Guide to Toxic Mortgages, Option ARMs, Distressed Properties, and Failed Loan Modifications

An updated chart highlighting the option ARM and exotic mortgage loans made during the height of the bubble still shows us that many loans will go bad in the next couple of years. We need to remember that the vast majority of troubled option ARMs were made from 2004 to 2007. While analysts claim that there will be no reset problems, courtesy of low interest rates, the real problem stems from the recast of the mortgage. Much of this is typically hidden until it explodes like a financial time bomb. The reason this issue has somewhat lost steam in 2010 is that now, the really toxic loans are segregated into a handful of states including California, Florida, Arizona, and Nevada. If you live in these states, be prepared for additional bumps in the housing road ahead.

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