
Here is a good chart that shows the expected peaks in Option ARM recasts and payment shocks. Payment shock simply means the "shock" when people see their payment sky rocket after they have had this low payment for so long due to the ARM adjusting. And keep in mind this is only Option ARMs, which are a tremendous problem and reason for the mess we are in. But this does not include all the "normal" mortgage out there, like a 30 year fixed, which are also defaulting at alarming rates. In fact, we have been seeing and hearing several things where the default rates on fixed, A-paper loans has surpassed other "riskier" loans. This is not a good sign.
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