[stylin19a]

When her interest rate jumped more than a year ago,

I don't get it. LIBOR rates are and have been at historic lows. Why should the rate jump even with a crap ARM...unless it was interest only.

[RockinRight]

It was probably LESS THAN Interest Only, an “Option ARM.”

An artificially low payment that doesn’t even cover the interest, but when the loan balance increases to where it’s more than about 115% of the original amount, you have to start paying back principal plus all the month’s interest.

[midcop402]

I think you are correct. It was probably an interest only loan. My dad went that route about the same time. He now has to pay the catch up rate. He is 84 and he thought he would be dead before the piper came due. He had initially asked me about it and I told him NOT to take an interest only loan.

My wife and I are trying to sell his house. We pray we get what is owed on the loan.