Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: russwinter who wrote (46153)	11/27/2005 2:15:01 PM
From: Ramsey Su	Read Replies (1) \| Respond to of 110194

"Here is an example of what worries Dugan and Lereah: A buyer with an option ARM borrows $360,000 at an initial interest rate of 6 percent. The borrower makes only the minimum monthly payment (initially $1,200, rising to $1,600 incrementally) for the first five years. In year six, if there is no change in interest rates, the payment is up to $2,500. If the interest rate has climbed to 8 percent from the current 6 percent, the monthly payment jumps to $3,166." so why is Lereah using 5 years? How about the 3-1 ARMs and the 2-28 subprimes?