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For those following the changing landscape of which mortgages are resetting or recasting when (and in particular, how many Option ARMS might implode), Credit Suisse has updated its chart.
Currently, the reset trend is forecast to peak in late 2011, early 2012. Add a year or more for foreclosure and you're in 2013/2014 before the ones in trouble wash out of the system.
While I don't doubt the interest rates will rise in the coming year, I don't think they are just going to shoot up and double peoples payment.
They are also, as stated in the article, just estimates. Do they have the numbers on how many of those ARM's have taken advantage of flipping over into a fixed rate product?
They do mention the government's "Home Affordable Refinance Program" but there are lenders that also have their own programs. My ARM reset a few times but never changed to any big degree but then our lender offered us a 3.5% fixed rate. Yes, ARM's reset but that does not mean they are all going into foreclosure.
Almost all ARMs are resetting lower. Makes the life of the doom merchant tough.
Doubtful that the $250 billion of option arms are going to recast lower, since they're likely neg-am right now. The rest depend on what the initial teaser rate was.
And what's with the "doom merchant" nonsense? I'm not sure how anyone can pretend that the people calling this bubble a bubble for the last 5 years or so were wrong.
Doubtful that the $250 billion of option arms are going to recast lower, since they're likely neg-am right now. The rest depend on what the initial teaser rate was.
And what's with the "doom merchant" nonsense? I'm not sure how anyone can pretend that the people calling this bubble a bubble for the last 5 years or so were wrong.
There was a credit bubble "everywhere". How much this affected real estate varied a bit from location to location, but I thought the whole "there's a problem everywhere but my location" went out a few years ago when the banking system just about shut down. How soon we forget even recent history.
So, do you guys really think we have hit bottom price-wise? Here in Chicago, prices have stalled but I think we will have another leg down with reductions necessary to get properties moving. I would not be surprised to see bottom price-wise another 1-2 years off, especially as you go up market.
What do you see cohdane?
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