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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Ramsey Su who wrote (44868)	11/6/2005 12:01:23 PM
From: russwinter	Read Replies (1) \| Respond to of 110194

The second is the impact of the ARMs adjustment vs reset. An adjustment is usually limited based on the original rate plus some maximum amount the loan may adjust up or down from. A reset is when the original terms are basically over and a totally new rate will start. > Excellent and key distinction. This chart shows resets idorfman.com <Can we afford to allow the real estate bubble to burst?> Obviously not a question of choices or options, other forces are at work: enabler buyer's strikes, inflation, and credit revulsion, combined with absurd maladjusted, speculative debt dependant asset prices.

To: Ramsey Su who wrote (44868)	11/6/2005 12:13:42 PM
From: dpl	Read Replies (3) \| Respond to of 110194

" The popular ARMs today are all the 1yr, 3yr or 5 yr ARMs with a reset at the end of the original fixed period. I believe this reset is something that may not only result in a huge payment shock but also is something that had not been stressed tested in previous markets, it did not exist in previous down cycles." This raises an important question.Can these people simply refi before resets into another low rate?

To: Ramsey Su who wrote (44868)	11/6/2005 10:36:27 PM
From: steve from ihub	Read Replies (2) \| Respond to of 110194

just playing around with my calculator and i get $1850 a month for the 5.25%, 30 year, 300k principal and $2007 a month for the 6.25%. can you check your figs? <The best way to compare apples to apples is to stick with, first of all, the 30 yr fixed rate conforming loan, which is a full doc loan, MI required for less than 20% equity and for loan amounts below $359,000. Let us use $300k loan amount as an example. At 5.25%, the monthly payment is $1,657. At 6.25%, the monthly payment is $1,847.