Whoa, did I hit a vein or what? You wouldn't believe the names I got called when I wrote an article a couple of weeks ago disparaging the newly crowned queen of all mortgage loans, the Payment Option ARM. I also received plenty of emails telling me that they too, think these loans have no place in this business. As a mortgage lender for over 15 years I've seen it all -- or at least can claim to -- and I'll typically get an email or two from consumers after they've read one of my articles. But the funny thing was that they were all from other lenders, or mortgage brokers.

It surprised me how passionately both sides argued their position. I didn't know loan officers cared that much about their loan programs but I was obviously wrong on that one.

First and foremost, my new friend Scott from California not so politely informed me that the article had plenty of mistakes, one being that one of the payment options I listed was a fully indexed payment, and an interest only payment. Those are of course, the same thing. He was right it should have read a fully "amortized" payment. I made the correction. Mea culpa. But then I thought, "Maybe that's another problem with these loans, all the various options also offer a new slew of disclosures, explanations, and glossy-eyed consumers."

Scott also reminded me that my statement about how Neg-Am loans can increase the consumer's buying power was completely wrong, and that I should get out of the home loan advice business, stick to journalism and let the "experts" offer loan advice. I agree with Scott, that a Neg-Am loan has nothing to do with debt ratios, therefore nothing to do with qualifying. However, that's not what the article said. It's lenders who claim (like Washington Mutual on their website) that Payment Option ARMs can increase buying power. I was just commenting on what companies are telling consumers.

He also stated that lenders use the fully-indexed, fully amortized payment when reviewing these loans. Maybe some lenders do, others don't. I know of one major lender that today qualifies at either the fully-indexed rate or a flat 4.5 percent, whichever is currently higher. In this instance, the fully indexed rate would be the qualifying rate at about 5.25 percent. As the piece said, there can be variations on the Payment Option ARM.

I got one email from a lender who agreed with my assessment that Neg-Am loans are not only bad news, but combined with various housing-price bubbles across the country and inflation on the horizon, that we could see some people in bad situations because they rarely, if ever make a full and regular payment. As unpaid interest is added back to the original loan balance, not only is equity stripped but also, the minimum monthly payment can shoot up if the loan balance represents 125 percent of the value. Immediately, the lender will change the minimum payment regardless of a cap. And if the borrower can't afford this sudden increase in payment, he could lose his home. This reader thinks that loans like the Payment Option ARMs are one of the reasons America is going down the tubes.

I wouldn't go that far, but to compare a loan program with national demise simply proves how heated the Payment Option debate can get.

Still another email scolded me saying that the Payment Option is best for investors who can use the extra money each month to invest in other things yielding a greater return. This email gave me two thoughts: Invest in what, WorldCom? I know, I know, the savvy investor will use their money wisely. Secondly, what loan officers are offering investment advice? To be fair, I did say at the end of the article that the Payment Option should only be considered by people who truly understand the product, but for the life of me I can't make sense of watching your loan balance grow and instead investing it in something else. One would hope that the investment does well enough to offset the ballooning mortgage balance.

But all in all, the original article wasn't meant to explain how Payment Option ARMs work from a technical standpoint. The article was addressed to the consumer, not the loan officer, that beware, bad things can happen with this loan. I don't like the product and won't push it. Other loan officers apparently live and die by them. Go figure.