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Paul Kiesel
Paul Kiesel
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Option Arm Loans More Danger Ahead

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For some reason economists and some in Washington seemed to believe the worst is behind us in a housing crisis.  I only wish that were true.  An entire class of loans known as Option ARM Loans (option adjustable rate mortgage loans) are still a significant threat to our economy.  These loans marketed to Prime borrowers (not subprime credit candidates) contained confusing and intentionally misleading or missing information.  Kiesel Boucher & Larson LLP continues to have over 50 class action lawsuits against the mortgage originator’s for these deceptive loans.  As discussed in the New York Times editorial, May 19, 2008 these loans were “Alt-A loans made to generally creditworthy borrowers, but often without verification of income or assets and on tricky terms, including the option to pay only the interest due each month. Some loans allow borrowers to pay even less than the interest due monthly, and add the unpaid portion to the loan balance. Every payment increases the amount owed.”  The full measure of the economic impact caused by these deceptive loans will not fully be felt for another year or more.  The Courts appear to be the only legitimate refuge borrowers have to contest these illegal and deceptive loans.