It’s not garden-variety ARMs coming up for reset, it’s Option ARMs coming to the end of their 5 year Option period that will then turn into 25 year amortizing loans. No amount of holding the short end down will prevent the sticker shock and resulting default wave on those loans, especially considering that some 2/3 of them are undergoing negative amortization as the borrowers make the minimum payment that doesn’t cover interest on the (steadily increasing)principle balance.
Righto. Hey which green?