Articles tagged: Negative Amortization 

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How to Slash Your Interest Rate While Converting Your Adjustable Rate to a Fixed Rate and Lower Your Payments written by Tom Brady
You might have enjoyed low interest rates in your adjustable-rate mortgage (ARM) during your initial payments. But now, the increase in interest rate is almost unbearable. It's time to do something.

Finally ‘Suitability’ Test Arrives At The Mortgage Industry’s Gate…How Bad Does It Have To Get written by Dale Rogers
The National Association of Stock Dealers (NASD) police and license stock brokers through the Series 6 and/or 7 licensing requirements as well as other controls on a nationwide basis. If an elderly person with fixed assets has a disportionate share of their assets in pork belly futures, index options or maybe a wild derivative product, this would be a case of crossing the line on suitability. Investment needs require matching with risk.

Like In The Most Horrific AND Scary Movie…The Audience Cries Out WATCH OUT…While The Actors Hear Nothing written by Dale Rogers
One has to wonder about borrowers signing up for a new Option ARM (Adjustable Rate Mortgage) with negative amortization and low teaser rates really know what is ahead of them. The slick computer models showing ‘what if scenarios’ make the case based on given assumptions. The term negative amortization is something that will be in front of their faces real soon. With a minimum payments starting in 1%, 2%, 3% etc. the real fully indexed rate which includes an underlying base of a chosen index plus the margin to make the real rate ticking away at maybe 4% to 6% higher. This thereby guarantees a negative amortization mortgage loan increases monthly or whatever adjustment period that is signed up for in the ARM instruments.

Dick and Jane Are Up To Their Elbows In Alligators and The Sharks Are Swimming In The Moat Around Their Home written by Dale Rogers
American families are waking up to the fact they are in deep doo doo upon the receipt of the first notice from the mortgage lender holding the Adjustable Rate Mortgage (ARM) that the mortgage payment is jumping up by a considerable margin. Family budgets are blowing up, savings are being exhausted, payments are being missed, credit card debts are exploding, credit scores are falling and their favorite dog spot does not have as many goodies to toys to play with.

Option ARMs: “The Sky is Falling…The Sky Is Falling So Says The Chicken Littles Of The World” written by Dale Rogers
Option ARMs are getting a lot of adverse publicity and regulatory attention. It’s kind of like a smoker suing for cigarettes causing cancer and getting Alzheimer’s in the process regarding the dangers of smoking. Likewise, anyone signing on for an Option ARM suddenly suffers the memory loss associated with plowing through a mountain of disclosures and examples indicating the dangers of the negative amortization and everything that goes with it. The high foreclosure rates in the ARM segment of the mortgage business will eventually sort itself out. There will be properties sold below acquisition prices, short sales by lenders, and a few precipitated bankruptcies when area prices fall and become soft.

Option ARMS utilized for investment property acquisition with an 80% or lower Loan To Value can lead to cash flow. Triplexes and fourplexes can meet the initial parameters of building a cash flow machine. Carefully put together Option ARMs can be an excellent mortgage vehicle for building cash flow in investment properties.

Home Loans and Negative Amortization written by Dan Lewis

Adjustable Rate Mortgages and Negative Amortization written by Dan Lewis

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