Sure its gone down some, but 70-80%? Gimme a break. I bought 2 1/2 years ago, paid $780K, financed 460K. House is approx worth the same +/- $20K. I have an ARM (still), been investing the difference I saved each payment, and threw some back on the principal to offset the Neg Am and then some. Loan is about $450K right now, and I have $10K in savings.

There used to be an old TV show in England that I watched called Dad’s Army. Reminds me of a funny line one guy always said "Don’t panic, Mr Mannering!"

LOL! I swear I was reading the entry above regarding "Why is everyone continuously too optimistic?" and talking about 80% drop in prices in Temecula… and I was thinking to myself "now here’s a person that could give Powayseller a run for her money…" then I scrolled down to see who posted it… Scharzad B.

"Superbear" to the rescue!

Thanks for checking in – I don’t mind her catastrophic views if in the end we all have to kiss her feet, I’ll be the first.

I don’t think I was harsh, just trying to get through. I’ve been frustrated, yes, because I don’t think I’ve made a dent.

I probably take it a little personal too.

The World Savings/Great Western/Home Savings Neg-am loan is the best loan ever devised for a guy like me – commissioned sales. I can give myself a break in the slow months, and ramp up in the good months.

But the original neg-am was civil. It had a 7.5% payment cap, 2.35% margin over the 11th District Cost of Funds Index, and a 125% cap before reset, which nobody ever hit.

When Angelo at CFC cranked down the terms, it became the 2nd-worst loan on the planet, after the 2-year fixed with two year prepayment penalty.

Angelo is a brilliant guy, and I have faith that he will get us out of this. If all he does is ease up on his 115% cap, and go back to 125%, it could change the outcome for a lot of homeowners.

I’ve been lurking for a long time. I think I originally saw the link to your blog on Ben’s. I appreciate your perspective and the real time information you provide.

I enjoy the different views participants have. While Schahrzad has more of a catastrophic view on what will come, she brings up some good points. I was surprised at your harsh response to her. Perhaps she’ll tweak her analysis when she considers that not all option arms are created equally?

Anyway, I’m firmly in the bear camp and lean more towards a correction somewhere between your predictions and SB’s. I can see superior properties dropping more than you anticipate due to reasons already pointed out by others on the blog. Unfortunately none of us know exactly what will happen. There are too many variables that could be thrown in the mix. Sometimes I think it’s going to be an extremely ugly correction and sometimes I think it’s just going to be ugly.

There are two problems with your "analysis".

1. You don’t know how Option-ARMs work, but you make statements as if you are the God Of Option-ARMs. I’d take your comments a lot more seriously if they were based on factual evidence, instead of wild speculation.

2. You won’t consider anything else possible, other than your "data". I lay out some facts about Option-ARMs, and you ignore it. I have foreclosure evidence available, but you won’t even consider other facts. You are right, and that’s it – end of discussion.

It shuts down the examination of any other possibilities for everyone.

This is the fourth and last time I’m going to try and point out that it’s not your message, it’s your delivery!

You’re not offending me or anybody else, I don’t think.

We just want to share ideas about what might happen in the future, and you come in here and obiliterate the conversation.

Please, start your own blog.

In the meantime, be open to other possibilites, let’s lay ‘em all out on the table, and take a look.

Who knows what might happen.

Love, Your friend Jim