Want to learn a little bit more? Just hit my FR page. Want to study the the big picture in detail? For all the naysayers out there: "Nothing to see here. Lock your doors and windows. Time to move on."
Posted on 09/05/2006 2:01:48 PM PDT by ex-Texan
With millions of adjustable-rate mortgages about to reset this fall, experts expect a wave of foreclosures by Americans in every income bracket. Here's why they could soar in late 2006 and beyond:
Those easy-mortgage chickens are coming home to roost.
This fall the adjustable-rate mortgages (ARMs) that millions of Americans took out during the recent housing boom will be reset, and many homeowners will see their monthly mortgage payments shoot up by as much as 20%. According to the Mortgage Bankers Association, of all mortgages financed in 2005, 36% were ARMs -- the highest ever.
This is a matter of concern because ARMs are typically initially made at a lower rate and then increase after a fixed period of time, usually one, three, five, seven or 10 years, after which the rate will more closely reflect current rates. As interest rates increase, mortgage payments increase. Between $400 billion and $500 billion in ARMs are due to be reset by the end of 2006. The following year will be even more dramatic, when more than $1.5 trillion will be reset.
For many Americans, this is scary news, if hardly unexpected. * * * [M]any of them are finding themselves stuck in a house they may soon no longer be able to afford, and, as the real estate market peters out, there's little they can do about it. * * *
Unprecedented situation:
* * * A major concern is that the number of ARMs issued at subprime rates to borrowers with lower credit ratings is not known. "We know that ARMs default at a higher rate than fixed, and subprimes default at higher rates than primes," says Sharga. "Never have so many ARMs reset at the same time. There is no precedent for it."
(Excerpt) Read more at realestate.msn.com ...
Want to learn a little bit more? Just hit my FR page. Want to study the the big picture in detail? For all the naysayers out there: "Nothing to see here. Lock your doors and windows. Time to move on."
It looks like California might just be a good hunting grounds for sweet real estate deals in the near future.
I do blame you, this is 100% your fault.
Cool. I've always wanted a place in Long Beach.
That Business Week article is a total hatchet job and fear-mongering piece designed to sell magazines.
*Ping*!
Not if the FHA starts offering 1%APR/no-down mortgages to illegals.
I never could understand the attraction of ARM's. When we refinanced to a lower rate, we went for a 15 year fixed.
Cry "Recession!" and let slip the vultures of opportunity.
Why not blame you? You've repeated the same thing for many months.
No sources listed for the map...
Wait! I thought it was Bush's fault.
There, the link is much more accurate.
Doesn't this just prove that California is the home of millions of people who don't have any common sense when it comes to handling money?
My house is paid off so all I owe are taxes.
So, in the worst-case scenario we are looking at a 4% default rate.
My, my, how frightening.
Is spamming with links to his site okay? Or should he give us all a break?
"When Will the Tsunami of Foreclosures Hit?"
My bet is the day the RATS take over congress.
The first thing they are going to do is close the deficit by retracting all the tax breaks. Then they will put us all back in the red by giving all that revenue to Blue state failed programs.
When the interest rates hit 21%, the RATS will blame Bush and the Republicans for it.
LOL!
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