One footnote to the ARM rests – the fallout is in no way limited only to purchase transactions; it also includes anyone who maxed out their mortgages during that time frame. It’s just a guess, but anyone who refinanced using an ARM probably withdrew much or maybe all their disposable equity when they did it; why else would someone use an ARM in a refi?
I’ve seen a number of foreclosure sales wherein the original sales transaction prior to the foreclosure was but a fraction of the foreclosed loans.
