Looking at the ARM-reset graph, I can see the bulk of neg-am loans are supposed to reset on the 33rd through 60th months. My guess is that they would reset way sooner because the denominator “value” in the loan-to-value ratio will become smaller in the following months which would trigger the early resets. If I remember correctly, the loan contracts for neg-am loans stipulate that the loan-to-value ratios are recalculated periodically. The value portion (the denominator) is a variable in the calculation that will deflate in future months. Hence, the bottom of market will be sooner than 2012.
