FSD, I was one of those who looked at the numers, and said we are screwed too. I am starting to adjust my thinking to what you are saying alittle, but I dont know if things arnt deeper than the interest rate suggests.
This whole mess was triggered by the FED raising rates. With inflation rising, they can only hold off on worrying about inflation for so long. It takes a year to get cuts into the economy, they started in Sept. so we are half way there. In 6-8 months they will have to start fighting inflation instead of fanning it, and the resets on these morgages will rise.
Also, just because these things are reseting, even to a lower interst rate, doesnt mean the monthly payments are not jumping. How many of these had horrendiously low teaser rates for the first year or two at maybe 1%-3%. How many had intro periods where they were interest only (or not even that) and then now are reseting to include principal into the mix. That could be a jump of 20%+ even if the interest rate didnt move an inch.
It isnt as bad as the numbers make it seem, but it isnt as good as the interest rates make it seem either.