Not sure what other banks did, but as far as WAMU HELOCS are concerned, the Fed funds rate cut that took effect on Sept 10th was not reflected to borrowers until Nov. 1st, affecting the Dec payment.
Also,Many subprime ARM loans have margins of 5% or higher.
Many resets could be based on a 12 month average rate which is figured 45 days before a loan resets. They do not simply use the lower current index on the day of adjustment.
Many people will still have large jumps in payment that will not be affordable. Most people cannot tell you what their index & margin even is, and what their payment will go up to if it is less than the max jump, which is often 2pts, and converts to an amortized payment rather than interest only.
