Most people who have an ARM right now were counting on appreciation. Without appreciation, many people are going to sink. It is true that lots of people moved up and put a lot down but that money is going to evaporate with retreating prices. It is all smoke and mirrors.
I believe that 80% foreclosure is a very high number. However, the foreclosure rate will reach highs never seen before. People with an ARM are paying into a pyramid scheme and are going to be left holding the bag.
I actually had a woman tell me recently that housing prices won’t decline because “so much wealth has been created in the last few years.” WHAT??!!
