A_AT1 Bank_NN1 Is_VBZ Survived_VVN by_II Its_APPGE Loans_NN2 In_II a_AT1 mortgage_NN1 market_NN1 gone_VVN crazy_JJ with_IW generous_JJ loans_NN2 ,_, no_PN121 one_PN122 was_VBDZ more_RGR generous_JJ than_CSN World_NN1 Savings_NN2 ._. 
Lots_PN of_IO banks_NN2 offered_VVD mortgages_NN2 that_CST allowed_VVD borrowers_NN2 to_TO pay_VVI less_DAR than_CSN the_AT amount_NN1 of_IO interest_NN1 being_VBG charged_VVN ,_, but_CCB World_NN1 was_VBDZ virtually_RR alone_JJ in_II making_VVG loans_NN2 that_CST let_VV0 the_AT borrower_NN1 continue_VVI to_TO make_VVI small_JJ payments_NN2 for_IF a_AT1 decade_NNT1 ,_, rather_II21 than_II22 two_MC or_CC three_MC years_NNT2 ._. 
Most_DAT banks_NN2 forced_VVD the_AT borrower_NN1 to_TO start_VVI making_VVG much_RR larger_JJR monthly_JJ payments_NN2 if_CS the_AT amount_NN1 owed_VVD --_JJ an_AT1 amount_NN1 that_CST could_VM rise_VVI each_DD1 month_NNT1 if_CS the_AT borrower_NN1 made_VVD the_AT minimum_JJ payment_NN1 --_NN1 rose_VVD to_II 110_MC percent_NNU of_IO the_AT appraised_JJ value_NN1 of_IO the_AT home_NN1 when_CS the_AT loan_NN1 was_VBDZ made_VVN ._. 
World_NN1 saw_VVD that_CST as_RG stingy_JJ ._. 
It_PPH1 did_VDD not_XX force_VVI the_AT payments_NN2 up_II21 until_II22 the_AT amount_NN1 owed_VVD was_VBDZ 25_MC percent_NNU greater_JJR than_CSN the_AT original_JJ value_NN1 ._. 
You_PPY ca_VM n't_XX get_VVI loans_NN2 like_II that_DD1 any_DD more_DAR ,_, of_RR21 course_RR22 ._. 
But_CCB World_NN1 's_GE old_JJ mortgage_NN1 loans_NN2 live_VV0 on_RP ._. 
Other_JJ banks_NN2 ,_, where_CS escalating_JJ monthly_JJ payments_NN2 are_VBR either_RR here_RL or_CC on_II the_AT immediate_JJ horizon_NN1 ,_, are_VBR facing_VVG the_AT need_NN1 to_TO foreclose_VVI or_CC renegotiate_VVI many_DA2 loans_NN2 ._. 
Within_II a_AT1 year_NNT1 or_CC so_RR ,_, most_DAT of_IO those_DD2 loans_NN2 will_VM have_VHI vanished_VVN ,_, for_IF better_JJR or_CC worse_JJR for_IF the_AT homeowners_NN2 and_CC for_IF the_AT neighborhoods_NN2 those_DD2 homes_NN2 are_VBR in_RP ._. 
Few_DA2 of_IO the_AT World_NN1 borrowers_NN2 face_VV0 such_DA imminent_JJ disaster_NN1 ,_, however_RR ._. 
And_CC that_DD1 is_VBZ why_RRQ it_PPH1 is_VBZ fascinating_JJ to_TO follow_VVI the_AT progress_NN1 of_IO World_NN1 's_GE mortgage_NN1 portfolio_NN1 ._. 
Some_DD of_IO those_DD2 homeowners_NN2 may_VM end_VVI up_RP all_RR21 right_RR22 ,_, being_VBG able_JK to_TO wait_VVI out_RP the_AT depressed_JJ housing_NN1 market_NN1 ._. 
And_CC if_CS the_AT local_JJ housing_NN1 market_NN1 fails_VVZ to_TO recover_VVI ?_? 
Homeowners_NN2 there_EX may_VM still_RR be_VBI able_JK to_TO wait_VVI out_RP the_AT process_NN1 ,_, making_VVG monthly_JJ payments_NN2 that_CST could_VM well_RR be_VBI less_DAR than_CSN the_AT cost_NN1 of_IO a_AT1 comparable_JJ rental_NN1 ._. 
If_CS such_DA an_AT1 "_" owner_NN1 "_" thinks_VVZ prices_NN2 are_VBR unlikely_JJ to_TO ever_RR come_VVI back_RP ,_, he_PPHS1 or_CC she_PPHS1 could_VM rationally_RR decide_VVI to_TO stay_VVI in_II the_AT home_NN1 while_CS doing_VDG little_RR to_TO maintain_VVI it_PPH1 ._. 
That_DD1 would_VM make_VVI the_AT house_NN1 even_RR less_RGR valuable_JJ for_IF the_AT bank_NN1 when_CS it_PPH1 finally_RR did_VDD foreclose_VVI ,_, and_CC it_PPH1 could_VM also_RR damage_VVI the_AT value_NN1 of_IO nearby_JJ properties_NN2 ._. 
No_PN121 one_PN122 expects_VVZ renters_NN2 to_TO do_VDI major_JJ maintenance_NN1 work_NN1 ,_, but_CCB in_II this_DD1 case_NN1 there_EX is_VBZ no_AT landlord_NN1 who_PNQS sees_VVZ the_AT necessity_NN1 of_IO such_DA spending_NN1 ._. 
Would_VM you_PPY like_VVI to_TO buy_VVI the_AT house_NN1 next_MD door_NN1 ?_? 
None_PN of_IO that_DD1 will_VM matter_VVI to_II World_NN1 Savings_NN2 ._. 
Golden_JJ West_ND1 Financial_NP1 ,_, the_AT owner_NN1 of_IO World_NN1 ,_, was_VBDZ bought_VVN by_II Wachovia_NP1 in_II 2006_MC ,_, at_II the_AT height_NN1 of_IO the_AT mortgage_NN1 boom_NN1 ._. 
Not_XX realizing_VVG it_PPH1 might_VM be_VBI acquiring_VVG a_AT1 time_NNT1 bomb_NN1 ,_, Wachovia_NP1 made_VVD things_NN2 worse_JJR ._. 
World_NN1 had_VHD demanded_VVN minimum_JJ annual_JJ payments_NN2 of_IO 1.95_MC to_II 2.85_MC percent_NNU of_IO the_AT loan_NN1 balance_NN1 ,_, but_CCB that_DD1 fell_VVD to_II 1.5_MC percent_NNU soon_RR after_II the_AT merger_NN1 was_VBDZ announced_VVN ._. 
After_CS the_AT deal_NN1 closed_VVD ,_, Wachovia_NP1 cut_VVD the_AT minimum_JJ payment_NN1 to_II 1_MC1 percent_NNU ,_, thus_RR offering_VVG the_AT most_RGT generous_JJ terms_NN2 at_II the_AT time_NNT1 housing_VVG prices_NN2 were_VBDR most_RGT inflated_JJ ._. 
It_PPH1 was_VBDZ not_XX until_CS mid-2008_MC ,_, long_RR after_II the_AT housing_NN1 market_NN1 began_VVD to_TO crumble_VVI ,_, that_CST Wachovia_NP1 stopped_VVD making_VVG such_DA loans_NN2 ._. 
Wachovia_NN1 is_VBZ also_RR gone_VVN ,_, sold_VVN to_II Wells_NP1 Fargo_NP1 at_II the_AT end_NN1 of_IO last_MD year_NNT1 ._. 
The_AT new_JJ Wells_NP1 Fargo_NP1 quarterly_JJ report_NN1 paints_VVZ a_AT1 sad_JJ picture_NN1 of_IO the_AT portfolio_NN1 of_IO "_" pick-a-pay_JJ "_" loans_NN2 that_CST World_NN1 and_CC Wachovia_NP1 originated_VVD ._. 
The_AT amount_NN1 owed_VVN on_II such_DA loans_NN2 at_II the_AT end_NN1 of_IO March_NPM1 was_VBDZ $115_NNU billion_NNO ,_, which_DDQ Wells_NP1 estimates_VVZ is_VBZ 107_MC percent_NNU of_IO the_AT current_JJ value_NN1 of_IO the_AT properties_NN2 underlying_VVG the_AT mortgages_NN2 ._. 
Just_RR over_RG half_DB the_AT owners_NN2 are_VBR paying_VVG the_AT minimum_NN1 allowed_VVN ,_, causing_VVG their_APPGE debt_NN1 to_TO rise_VVI each_DD1 month_NNT1 ._. 
A_AT1 loan-to-value_JJ ratio_NN1 of_IO 107_MC percent_NNU is_VBZ bad_JJ enough_RR ,_, but_CCB it_PPH1 is_VBZ an_AT1 average_NN1 and_CC many_DA2 loans_NN2 are_VBR in_II much_RR worse_JJR shape_NN1 ._. 
For_IF loans_NN2 in_II California_NP1 ,_, the_AT average_NN1 is_VBZ now_RT 120_MC percent_NNU ,_, and_CC the_AT figure_NN1 is_VBZ no_RR21 doubt_RR22 much_RR higher_JJR in_II such_DA troubled_JJ areas_NN2 as_CSA the_AT Central_JJ Valley_NN1 and_CC the_AT so-called_JJ Inland_JJ Empire_NN1 ,_, where_CS nearly_RR a_AT1 third_MD of_IO the_AT California_NP1 loans_NN2 were_VBDR made_VVN ._. 
Wachovia_NP1 estimated_VVD that_DD1 last_MD September_NPM1 the_AT loan-to-value_JJ ratio_NN1 in_II the_AT Central_JJ Valley_NN1 was_VBDZ 132_MC percent_NNU ._. 
Since_II then_RT ,_, the_AT median_JJ sales_NN price_NN1 of_IO homes_NN2 in_II that_DD1 area_NN1 has_VHZ fallen_VVN another_DD1 20_MC percent_NNU ._. 
In_II all_DB ,_, more_DAR than_CSN 70_MC percent_NNU of_IO the_AT pick-a-pay_JJ loans_NN2 are_VBR in_II California_NP1 ,_, Arizona_NP1 or_CC Florida_NP1 ,_, three_MC states_NN2 where_RRQ prices_NN2 rose_VVD the_AT fastest_RRT during_II the_AT boom_NN1 and_CC have_VH0 since_RR fallen_VVN the_AT most_RRT ._. 
Wells_NP1 says_VVZ it_PPH1 thinks_VVZ 61_MC percent_NNU of_IO the_AT loans_NN2 in_II those_DD2 three_MC states_NN2 will_VM not_XX be_VBI paid_VVN as_CSA required_VVN by_II the_AT mortgage_NN1 ,_, in_II contrast_NN1 to_II 36_MC percent_NNU of_IO the_AT loans_NN2 in_II other_JJ states_NN2 ._. 
One_MC1 sad_JJ aspect_NN1 of_IO all_DB this_DD1 is_VBZ that_DD1 World_NN1 Savings_NN2 said_VVD it_PPH1 tried_VVD to_TO be_VBI more_RGR responsible_JJ than_CSN many_DA2 lenders_NN2 during_II the_AT craze_NN1 ._. 
It_PPH1 did_VDD not_XX sell_VVI its_APPGE loans_NN2 into_II securitizations_NN2 ,_, so_CS it_PPH1 knew_VVD it_PPH1 stood_VVD to_TO lose_VVI if_CSW a_AT1 loan_NN1 went_VVD bad_JJ ._. 
