Gerry Brown is the latest to freak out OptionARM mortgages. Today he sent a letter to 10 large banks asking how they plan to deal with them.
HousingWire: California accounted for more than 25% of the nation’s foreclosure activity in Q309, the attorney general’s office said, with 250,000 homes receiving foreclosure filings in the state. In addition, foreclosure activity increased nearly 20% from 2008 to 2009, and Brown said pay option ARMs could make that problem worse.
“Homeowners with Pay Option ARMs are sitting on ticking time bombs that the lending industry has the power to defuse,” Brown said. “Unless these banks and loan servicers act quickly, hundreds of thousands of mortgages will reset across the state, creating a new wave of foreclosures.”