I have been pretty unsettled about the reset charts lately. Moreso because of the current activity then anything else. I am starting to think more and more that not only will we see a robust spring in 2009, but the rest of 2008 may not decline with the gusto that I as a buyer am hoping for. I am not so sure where more pain will come from, the ALT A or the Option ARMs and to be honest I am not so sure it will matter. What will be interesting to see is that whether there will be massive writedowns or rewriting of these loans with loss of principal. In the absence of that, I think that the real pain will not be felt until the 2011/2012 timeframe. Also it should be worth noting that the sum of the ALT A and ARM totals is actually less then the sum of the Subprimes. I don’t believe this will affect the depreciation that much. I guess my point is that it would not surprise me to see even more of a bounce in 09 then we saw this spring. To me that would be the true eye of the storm. Also to note this chart is a bit dated. There absolutely will be some of these loans that do get refinanced even with a loss of equity. How many? Probably not an appreciable amount.
