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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: CalculatedRisk who wrote (26977)2/22/2005 4:19:21 PM
From: russwinter  Read Replies (1) of 110194
 
We know that a bunch of these more egregious Bubble real estate transactions were done with ARMs and IOs over the last several years. This article indicates 60% of all Calf mortgages done in 04 were ARMs.
Message 21068645

But I've been searching high and low for the real time, or very current numbers of these, or percentage of these that reset in 2005? I can't find it though. Those people (and we only need a portion to crater the overleveraged housing sector, and then in turn the consumer and "easy" finance market)will start blowing up even with current 3.5% like Libor rates,
libor-loans.com
and any higher, look out. I really believe we are at a tipping point, and the magnitude will be determined by how much higher rates go, or if they pause here, then the passage of time will have a gravity effect as cohort after cohort gets hit with resets, and higher HELOCs interest payments, or it will a combination of time and higher rates. One could apply a sensitivity measure to all this. I don't really want a national figure because modest $150k thirty year mortgages in Topeka will only be a small part of the problem. Therefore I'd say the focus should be on the mutha Bubble, California (loosely defined to include LV, Ariz, Portland, Seattle, Hawaii). This kind of stuff:
realestatebubblewatch.com
piggington.com
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