Because of the resulting payment shock, these loans are sometimes referred to as “exploding ARMs.” This allows the homeowner to pay just the interest (not principal) during an initial period. Still another is a "payment option" loan, in which the homeowner can pay a variable amount, but any interest not paid is added to the principal...
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Still another is a "payment option" loan, in which the homeowner can pay a variable amount, but any interest not paid is added to the principal. Further, an estimated one-third of ARM originated between 2004 and 2006 had "teaser" rates below 4%, which then increased significantly after some initial period, as much as doubling the monthly payment...
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subprime mortgage crisis Some compelled to resort into fraud. 1,411% increase of fraudulent behavior reported by the U.S Department of Treasury between the years of 1997 to 2005...	2 / 497
Subprime Mortgage Industry Collapse However, once interest rates began to rise and housing prices started to drop moderately in 2006'' 2007 in many parts of the U.S., refinancing became more difficult...	4 / 933
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