First, the Option ARM IS NOT an inherently evil or bad mortgage product. In fact, for a
select group of
financially sophisticated borrowers the Option ARM is a great fit, however for the average consumer it is not the appropriate financing vehicle for them to utilize.
One of the best metaphors I have ever heard regarding the Option ARM product comes from America's Most Opinionated Mortgage Broker, Brian Brady. This is what Brian has to say:
"The option ARM can be likened to OxyContin; very powerful and effective when used as directed. The problem is that it was dispensed like aspirin; often, liberally, and OTC by those untrained in its effects."
Well said Brian!
A few days ago I made a post regarding a local mortgage company running an infomercial hawking Option ARM's as the best thing since sliced bread. When I saw his infomercial and what in my opinion is a dangerous sales methodology that has hurt so many people over the last few years, I was very upset.
As mortgage professionals it's up to us to make sure this OxyCotin loan program is prescribed appropiately!
;)
;)
