CR = What about those Option ARMs?

[mEDITate-OR:
not see what is not there...

We have been saying for over a year that the 2nd wave of bad ARMs & subprime loans does NOT take into consideration the fact that over 85% + of them have already been or are in foreclosure or BK. These bad sand state RE loans are GONE, already!
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First, many of the loans have already defaulted. There is a difference between the original recast date, and the actual recast date - because negatively amortizing loans hit the recast ceiling earlier than the original forecast - and those loans have already defaulted (or have been modified). 
Second, some of these loans were modified (Option ARMs and Alt-A loans were targeted by the banks for internal modification programs), and some of these borrowers have probably refinanced - the few that had some equity.
Third. But what these graphs don't show is a huge spike in Option ARM and Alt-A loans delinquent or in the foreclosure process. Although there will probably be more delinquent Option ARM and Alt-A loans next year, I'm more concerned about falling house prices and negative equity than a huge wave of Option ARM and Alt-A defaults.
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CR = What about those Option ARMs?
http://www.calculatedriskblog.com/2011/01/what-about-those-option-arms.html
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