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

To: russwinter who wrote (45842)	11/18/2005 6:33:46 PM
From: Ramsey Su	Read Replies (1) \| Respond to of 110194

Russ, as you can now tell, this CNN reporter did not pick up on the difference between a reset and an adjustment. With the nation's savings rate at zero, how many households can handle the reset? I think the new loan program next yr is going to be the 2-40. 2% increase in interest, 40% increase in payments. Ramsey

To: russwinter who wrote (45842)	11/18/2005 7:13:28 PM
From: Roads End	Read Replies (2) \| Respond to of 110194

I remember taking out an ARM in 1984 at around 10.375% that capped out at 15%. At the time interest rates were starting to head south so I thought it a decent risk. For the life of me I can not see what the motivation was to save a crummy point or two with an ARM when rates were at rock bottom.

To: russwinter who wrote (45842)	11/19/2005 12:04:39 PM
From: Ramsey Su	Respond to of 110194

I think their timing is off by a few months. Using one of ild's handy dandy charts, looks like next spring is going to be start of the onslaught, when the 3-1s resets take place. The borrowers who either purchased or refinanced at that time had little incentive to refinance again after that period. Assuming lenders/servicers are fully aware this problem, there may be a rather unexpected round of refinances to soften the blow for those who have the ability to do so. idorfman.com