If any of you really belive this is over, or that the high-end won’t get hit, do you realize the Option ARM and Alt-A resets are due to hit in mass in 2010-2012? What % of these mortages do you think really got adjusted to fixed? How many of those adjusted will still go into default anyway? What more ammunition does the gov have to fend off this next foreclosure wave? Hard to lower interest rates any more than 0%.[/quote]
I agree that Option ARMS are toast.
But your typical Alt-A 5/1 ARMs are currently resetting to levels at or below their initial rate. In fact, the LIBOR would have to jump by nearly 3 percentage points from topday’s rates for the typical alt-A 5/1 ARMs to reset above 6%.
