Deferred interest more than doubled at Golden West Financial, Oakland, Calif., in the second quarter, a sign that its customers are choosing the lowest payment possible on their payment-option adjustable-rate mortgages.According to the thrift's earnings statement, deferred interest (which reflects the balance of negative amortization) rose to $914 million on loans receivable and mortgage-backed securities, compared with $448 million at Dec. 31. Even though the figure rose dramatically, Golden West's nonperforming assets totaled just 0.37% of all assets. A year ago the ratio was 0.28%. The holding company and its thrift affiliate, World Savings, are being sold to Wachovia Corp., Charlotte, N.C. Golden West earned $390 million in the second quarter, an 8% increase from that of a year earlier. The company funded $11.7 billion in mortgages in the second quarter, but did not say how much of the volume was option ARMs. The company helped pioneer the option ARM product but is not the largest funder. In the first quarter, Countrywide Home Loans ranked first in option ARM lending with $20 billion, according to the Alternative Products Quarterly Data Report, a MortgageWire affiliate.

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