Arm-twisting?

Washington Mutual CEO Kerry Killinger shown here in 2007.

I’ve read with interest, David Heath’s stories about the demise of WaMu. In Sunday’s article he writes: “The new WaMu used huge sales commissions and misleading marketing to hawk risky and overpriced loans to borrowers.” Full story here: http://www.spokesman.com/stories/2009/nov/08/arm-twisting-helped-sink-wamu/

While such business practices are deplorable, the following statement got me wondering about consumer responsibility: “WaMu and its brokers promoted this feature as a benefit for borrowers. Pay less on your mortgage and take that vacation you’ve always dreamed of. WaMu lured borrowers with a very low interest rate of about 1 percent. But this “teaser” rate was good only for one month. After that, the option ARM could have far higher interest rates than conventional 30-year fixed-rate loans.”

No one can make you refinance your home and adjustable rate mortgages are notoriously risky. What part did greedy or gullible consumers play in this mess?