Well, the hits just keep on coming. If you are planning on getting a pay option ARM loan anytime soon, you better hurry or make sure you have 750+ credit, 6+ months of reserves (of the fully amortized payment), a good salary, and no debt. Otherwise, you can pretty much forget about it.  Wall Street investors for MBS (Mortgage Backed Securities) are cutting their spending habits when it comes to these types of loans and it certainly appears that it is a matter of time before they disappear until the next big boom cycle or until someone with the cash in hand to pay off a loan like this walks in the door. AHM will be closing their doors tomorrow, ABC should be doing the same soon, IndyMac stated that their profits were hammered year-over-year this week and there has been similar news from other shops in the industry.  The scary part is that we are seeing the ALT-A market begin to crumble under the pressure.  There are some that think this is just a story the media is blowing up and there are others who think it means real trouble in the real estate lending market. I fail to see how the former can really form an opinion like that, especially if they are involved in home mortgage lending.

tags: alt-a, lending, loans, mortgages, sub-prime