Too true FSD, too True. Current rates on adjustable loans can all to often move DOWN, easing payments for the next 6-12 months. Interesting to think that even with that we still have increasing foreclosure actions.

But lets go back to this time two years ago (ie before the recession started) and see what 12 month LIBOR is.

—–>5.275%. (sept 07)
+2.25 and your rounding 1/8th and we have 7.6%.

Going back to 2002-2004, we see the same 1.3-1.4% LIBOR rates back when FED overnight lending rates were 1% HIGHER, and they hadnt flooded the market buying nearly ever piece of trash paper they could pick up. Or have to bail out the largest insitiutions from their own stupidity with direct infusions of capital, everyone is looking at you citi and BOA.

So rates have hit what seems to be a structeral bottom and can only go up from here, albeit I have a feeling not for atleast another year so the fed can get another bubble going in something.