According to this LA times article, the looming mortgage resets are not going to be as bad as preceived.

Here’s my response.

Bloomberg TV played an interview today of the CEO of Wells Fargo. Yes he said that resets are a non event, because his company is seeing over 30% default rates (subprime mortgages) happening BEFORE those mortgages even reset, and over 5% default rates before reset similarly with ARM’s held by what they thought were strongest prime borrowers. He explained that the resets were less of a factor because many homeowners were in homes they cannot afford on ANY loan payment plan, even neg-amort payment plans.

I think he said the Wells Fargo mortgage portfolio is something like twelve billion.

I’m thinking to myself, “OK, then why did you banking retards approve loans to those homeowners?”