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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: ild who wrote (45697)11/17/2005 7:52:10 AM
From: Ramsey Su  Read Replies (1) of 110194
 
Earlier this week, I talked to a WAMU loan agent. He remembered the straight ARM as the most popular program in San Diego when the refi wave started.

While it is probably a Southern California phenomenom, it is not insignificant. So these people should have had no incentive to refi other than the security of a fixed rate. Since these ARMs all have the ADJUSTMENT CAPS (1% interest and 7.5% payment), the payment shock is gradual.

The infamous 10 portion of most 80-10-10s were and still are typical adjustable prime+ products. So those loans have seen almost a double since 2003.

At this stage of my credit event crusade, I opine that payments are already stressing the borrowers to the max. The only salvation has been price appreciation.
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