I should know

Downey Financial: Higher Delinquency When Minimum Payments Reset

Wait till these Option ARMs start to kick-in for WaMu and Countrywide. You ain't seen nuttin' yet!!!

Wells Fargo is one of the very few national lenders that never did Option ARMs; they don't have one on their books. Wachovia picked-up a mess of them when they bought Great Western. Talk about bad timing.....

E*Trade, Wells Fargo and Downey: 'Subprime' Problems With Prime Loans

As I posted before on part of this subject, the home equity loans that Wells Fargo is concerned about are not necessarily subprime loans due to credit scores, they are "less than prime" because they were originated by third party sources, mostly under supervised, less than trustworthy brokers, the source of 90% of all subprime loans whether firsts mortgages or seconds. The loans that were originated and processed directly by their retail origination platform are very well underwritten and high performing loans. Wells Fargo did not do even one of those toxic Option ARMs because of Wells Fargo's conservative underwriting and their believe that those loans were never in the best interest of their customers. Wells Fargo was the number one mortgage originator for almost 10 years, but gave up that spot because they were unwilling to put their customers in exotic toxic mortgages. They knew they missed out on at least 25% of the origination opportunity during '03 to '06, but the decision and their high ethics are proving correct. They’re taking their lumps on these less than perfect home equity loans that they funded for brokers and a few other brokered-in loans, but they have far less exposure than most other major banks and mortgage companies.