option arm

Option Arm Mortgage Resets - A Tidal Wave is about to Hit

States are now warning the Obama administration on a coming tidal wave of option arm mortgage resets:

"Payment option ARMs are about to explode," Iowa Attorney General Tom Miller said after a Thursday meeting with members of President Barack Obama's administration to discuss ways to combat mortgage scams.

The mortgages differ from other ARMs by offering an option to pay only the interest each month or a low minimum payment that leads to a rising balance in the loan's principal.

In other words, these are those interest only mortgages that eventually want some principle in payment. These are those teaser rate mortgages.