Subprime Disaster Passes the Torch to Option ARM

The WSJ reports that option adjustable-rate mortgages (Option ARMs) are taking the torch of the housing disaster from subprime mortgages.

Yes, the circle of death rolls on in the US housing market – what started as a subprime fiasco is evolving into a more inclusive party, with Option ARMs rolling up, kegs and cigars in hand.

A couple of months ago, we published a guest piece by Doug Hornig, who pointed out that Option ARMs would be the next shoe to drop in the real estate disaster. Here’s the chart once again that Doug included in the previous article – yikes!