Aw, Hell. What is a "negative amortization" loan. That's not really what I think it is, is it?
Turn on the radio, and all you hear is one stupid loan pitch after another. Home Equity Lines of Credit... Home Equity Credit Consolidation... Interest Only Loans... 100-Year Mortgates. Who goes for these things?
The first two are quite useful. Home improvements or paying off credit cards. Is it still debt? Yes, but it's cheaper and easier to manage and still better than bankruptcy or being destitute. The problem is that so many people run the cards right back up.
The last option is for people stupid enough to live in places like San Francisco where a 2 bedroom mobile home costs 400 grand.
Negative Amortization means that your "minimum" payment (the payment they actually bill you for that you have to send) is less than the amount of accrued interest. In other words, if you never pay more than the minimum your balance actually INCREASES...