Jim, thank you for explaining Option ARMs. Can you explain why a payment does not double when the interest rate has risen from 6% to 8% at the time of the loan reset?
This chart, from Forbes, shows that Americans are increasingly using cash from their homes to make up for a savings shortfall. This graph is the reason that I believe we as a nation are not prepared for mortgage payment increases. This chart is scary. I think most people with adjusting mortgages will need to find a way out. This graph shows there is no savings to fall back on, and that cash from homes has been used up. Where is the equity? What has been done with the cash that was extracted? It certainly didn’t go into savings.
[img_assist|nid=1631|title=Hey, Big Spender|desc=Americans are using cash from homes to replace savings|link=node|align=left|width=400|height=352]
