- This topic has 3 replies, 3 voices, and was last updated 17 years, 11 months ago by powayseller.
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November 8, 2006 at 5:57 AM #7865November 8, 2006 at 8:25 AM #39490woodrowParticipant
As an example, and I don't have the actual numbers, let's imagine that 15% of ARMs in San Diego are resetting this year, and 13% defaulted. That is almost a 100% default rate.
That's quite an imagination – I haven't seen any data suggesting default rates anywhere near 100%.
While I too believe reseting ARMs will be a problem in the next couple of years, suggesting 90% defaut rates without any actual data to support your position makes you appear to be an alarmist.
Love your posts PS, but when you make these type of predicitons based off of a "let's imagine" data set, you're no different than the cheerleaders on the other side arguing that a soft landing is in order.
Just my $.02
November 8, 2006 at 10:08 AM #39502sdcellarParticipantI’m not sure why you quote this guy as he seems as much a cheerleader of the RE industry as anybody else on that side of the fence. His message is always the same, i.e. sure there will be some decline, some defaults, but it will be spread over a number of years and won’t really have any significant impact on anything. Cagan’s as bad as David Lereah if you ask me.
(not to mention, he’s not really supporting your point)
November 8, 2006 at 1:39 PM #39538powaysellerParticipantCagan is more optimistic than I am, but I wanted to show his viewpoint. I’m surprised by his comment that 13% of recent ARM buyers are likely to default. After home prices drop further and more equity is erased and the bulk of loan resets start, the 13% number is likely to rise very fast.
I did make a mistake. I thought he meant that 13% would default this year, and thus the other 87% would default later, but he means 13% are likely to default, ever. Sorry for not reading that properly, and thanks for pointing that out.
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