2008-10-08 — ml-implode.com
"Arguably, given that Pay Option ARMs adjust monthly or quarterly in most cases, if LIBOR comes down quickly payments will roll back down with their respective index term value. However, if LIBOR hangs up there this will borrowers will scream towards their maximum negative amortization allowance of 110%, 115% or 125% accelerating the time-line to the ‘Pay Option ARM Implosion."
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