PIMCO says...82% of CA purchase loans are interest only or Option-ARM
The data below is from Scott Simon of PIMCO:
The really negative sign for us is the fact that, last year, 82 percent of the purchase loans in the state of California -- Orange County being representative -- were either interest-only or negatively amortizing loans. We view that not as an economic choice people were making, just simply an I-can’t-afford-the-house choice.
Need I say more?!?!? If you have been reading this blog, you know what happens when ARMs adjust, and how neg-am (option-ARMs) work. I'm just glad that a major company compiled the data that backs up what I have been seeing on a daily basis for a while now. Patience will be rewarded...