if you bought or refinanced your house in the last few years, it's not unlikely that you have one. With an "option ARM" loan you have the "option" (which most borrowers happily take) of paying less than the interest; the magic of "negative amortization"... Just two banks, Washington Mutual and Countrywide, wrote more than $300 billion worth of option ARMs in the three years from 2005 to 2007, concentrated in California. Others—IndyMac, Golden West (the creator of the option ARM, and now a part of Wachovia)—wrote many billions more. The really amazing thing is that the meltdown in California is already happening and virtually none of these loans have yet reset.For these people, whose debt is now much higher than the value of their once million-dollar home, walking away may be the only option. Of course that might make it more difficult to buy a new home in the future, but with so many people in this position, it might not. Like getting a new credit card just a couple of years after declaring bankruptcy, the de-ARMed might end up with more conventional mortgages in the future. All of this seems both too confusing to understand and at the same time much closer to "home" than the subprime mortgage crisis for most people reading this. But it's really no more difficult to get than the drowning of New Orleans. Banks invented all sorts of dangerous financial products that lured even the most educated among us into taking on ridiculous amounts of debt. We banked on the rather crazy idea that a hurricane of declining home values would never hit us directly. Then, as the reality sunk in that housing prices were falling, that what goes up really must come down, the flood of insanely high mortgage payments arrived. Like Katrina, there were warnings. This was not last month that Gimein was warning about exploding "ARMs;" it was April of 2008. And he was not alone in warning us about the subprime mortgage crisis of the middle and upper classes. But like New Orleans, the people who were supposed to be making sure we were safe- which is to say, the government- were looking the other way. Why? Because the "market would solve everything." The market, also known as unfettered greed, was the hurricane. Now homeowners are being told to suck it up and somehow pay off the mortgages. But they'd be better off abandoning their doomed homes and finding shelter elsewhere. What will happen after the storm of exploding "ARMs" is difficult to know. Perhaps the government will be better at helping these (middle and upper-class) homeowners than it has been in New Orleans. Or perhaps a lot of formerly posh people will be living in the equivalent of FEMA trailers.