This is getting ridiculous.  It seems I can't turn on my computer with reading someone's post about "how bad the Pay Option Arm is" to the consumer.

Why is this ridiculous?  Because these people, who are usually mortgage brokers or newspaper editors, all say the same thing.  Everyone comments or complains that the minimum payment causes the balance of the mortgage to go up....bla-bla.

To this I say....DUH!   If the folks that wrote this stuff would take the time to understand that's the way this mortgage was DESIGNED, they would get their eyes opened.   Think about it folks, banks don't want to get the house back.  The banks that do the POA right, and hold on to the loan, don't make money with this loan until sometime after year 3 or 4.  Yes, the argument can be made that they "sell the mortgage so they make money from the sale". 

OK, I'm no economics major, so I have to break things down to keep it simple in my mind.  I've always been taught that if someone invests in something, they are under the assumption that their investment will make money, right?  

So, it's pretty safe to assume a company who purchases a bundle of Option Arms from an investor or bank is wanting to make money, right? 

These companies don't make money if the borrowers don't pay on the mortgage, right?

Why would ANY company make an investment on something where they are sure they wouldn't get a positive return?  That just seems mind boggling to me.  I'm sure there are several layers of this buying and selling going on, but somewhere down the line there has to be an end user.  That end user wants to make money also, right?  

If someone doesn't make their payments and the house is foreclosed on, that end user is the one holding a useless mortgage and not making money from it.  A very high percent of the time, they will not make money on the sale of this foreclosure home.  

If there is a high percentage of NOT making money from this investment, I would have to believe there wouldn't be a demand to purchase these loans.  If that's the case, NO ONE would be willing to purchase this type of loan, right?

My point is, as I've said before, it's NOT the Option Arm that is causing all the negative press, it's the brokers that DON'T UNDERSTAND HOW TO SELL IT OR WHO TO SELL IT TO!   But, since a lot of brokers are just in it to make a quick buck, they just sell it anyone and move on. 

*note* There are a LOT of Mortgage Folks who sell it the right way but they are over shadowed by the negative press.  *note*

I'm sure some financial guru will write me and tell me about the way the market works and the theory's of Adam Smith's.....bla-bla.   I'm sure it's fascinating, but frankly, I'm not interested.  Sorry to be so blunt.  

Don't get caught up in the negativity with the Pay Option Arm, research it for yourself.  Understand it for yourself.  Learn who can benefit the most from it and target that market.  Now, go out there and sell.