Research (or Speculation) as to timeline for Mortgage Resets and NODs

[4plexowner]

Let’s see, minimum wage of $8/hour – 2000 hours per work year

WOW – that’s $16,000 annual income !!!!!! (before Uncle Sam and Uncle California take their share)

Holey smokes – mattress sales should be going up since all these workers will need somewhere to hide all this income

[Borat]

I didn’t mean to say that an inflationary scenario would prevent home prices from coming down, just that it may skew when things happen and by how much. Looking at ARM reset charts gives us a scale of magnitude for the problem, but using them to try to time the market is probably ill-advised, especially since monetary policy will have a huge impact on whatever happens. Whether we like it or not, inflation will help some ARM borrowers and might actually keep a few of them from losing their homes. Looking at past performance as a predictor, it’s still a fair bet (IMO) that the fed/government will try and print their way out of this mess…

[Borat]

I didn’t mean to say that an inflationary scenario would prevent home prices from coming down, just that it may skew when things happen and by how much. Looking at ARM reset charts gives us a scale of magnitude for the problem, but using them to try to time the market is probably ill-advised, especially since monetary policy will have a huge impact on whatever happens. Whether we like it or not, inflation will help some ARM borrowers and might actually keep a few of them from losing their homes. Looking at past performance as a predictor, it’s still a fair bet (IMO) that the fed/government will try and print their way out of this mess…

[Nancy_s soothsayer]

Based on the reset chart, the ginormous tsunami will strike hard around October and November this year. That in itself is a good basis to time the market, Borat.

In the month of October 2007 alone, more than $50 billion out of the $2 Trillion in resetting ARMS within next 18 months will jolt people. If the LTCM implosion caused panic in Wall Street, a conservative 20% defaulting of that $50 billion will cause more panic, Borat. Please don’t find salvation from Uncle Sam (they botched Katrina, remember?).

[Nancy_s soothsayer]

Based on the reset chart, the ginormous tsunami will strike hard around October and November this year. That in itself is a good basis to time the market, Borat.

In the month of October 2007 alone, more than $50 billion out of the $2 Trillion in resetting ARMS within next 18 months will jolt people. If the LTCM implosion caused panic in Wall Street, a conservative 20% defaulting of that $50 billion will cause more panic, Borat. Please don’t find salvation from Uncle Sam (they botched Katrina, remember?).

[Borat]

I’m not looking for any salvation, I’m just pointing out a likely course of action from the government and fed. The housing market is at the beginning of a loooooong downward slide, but the inflationary scenario could mask the issue for a little while longer. Remember that there’s only 18 months left in this administration. Optimally they’d like to delay the inevitable collapse until then so that it can be blamed/dumped on whoever gets elected next.

[Borat]

I’m not looking for any salvation, I’m just pointing out a likely course of action from the government and fed. The housing market is at the beginning of a loooooong downward slide, but the inflationary scenario could mask the issue for a little while longer. Remember that there’s only 18 months left in this administration. Optimally they’d like to delay the inevitable collapse until then so that it can be blamed/dumped on whoever gets elected next.

[4plexowner]

you are correct Borat, the Fed will run the printing presses in response to any financial challenges

they are already inflating the money supply at 12% (based on reconstructed M-3 by John Williams’ shadowstats.com and others) – they will increase that rate (or add printers) as needed

this is Keynesian economics in a nutshell: if there is a problem print more money

the Mogambo Guru once quipped that the esteemed Mr. Greenspan could easily be replaced by a retarded chicken in a cage with a big red ‘Print money’ button

only time will tell if running the printing presses will work one more time

[4plexowner]

you are correct Borat, the Fed will run the printing presses in response to any financial challenges

they are already inflating the money supply at 12% (based on reconstructed M-3 by John Williams’ shadowstats.com and others) – they will increase that rate (or add printers) as needed

this is Keynesian economics in a nutshell: if there is a problem print more money

the Mogambo Guru once quipped that the esteemed Mr. Greenspan could easily be replaced by a retarded chicken in a cage with a big red ‘Print money’ button

only time will tell if running the printing presses will work one more time

[Raybyrnes]

I have spoken iwth a number of friends who work at many of the larger banks they are seeing many more people walking into a branch on the 16th of the month with Credit Card Cash advances to make their payments. People are beginning to go to the well for the monthly payment.

[Raybyrnes]

I have spoken iwth a number of friends who work at many of the larger banks they are seeing many more people walking into a branch on the 16th of the month with Credit Card Cash advances to make their payments. People are beginning to go to the well for the monthly payment.

[(former)FormerSanDiegan]

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?

There could be a host of reasons. I have two personal examples, since I refinanced to ARMs twice in my life. In neither case did I tap additional equity.

In one case it was to get a much lower rate on a house I planned to sell within 2-3 years (personal residence sold in ’05). In this case no additional equity was taken out and the loan was about 65% LTV and for the 2 years I remained, I saved about about $400 per month. In the other case, it was a rental property, where I wanted to improve cash flow, so I lowered my payments and took a 5-year AR at about 50% LTV

Maybe I’m the exception, but at times there are lots of reasons to consider ARMs rather than equity extraction. However, in the current market the spread between 30-year fixed and 3, 5, 7 and 10 year ARMS is so small that it makes sense for a lot fewer people these days.

[(former)FormerSanDiegan]

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?

There could be a host of reasons. I have two personal examples, since I refinanced to ARMs twice in my life. In neither case did I tap additional equity.

In one case it was to get a much lower rate on a house I planned to sell within 2-3 years (personal residence sold in ’05). In this case no additional equity was taken out and the loan was about 65% LTV and for the 2 years I remained, I saved about about $400 per month. In the other case, it was a rental property, where I wanted to improve cash flow, so I lowered my payments and took a 5-year AR at about 50% LTV

Maybe I’m the exception, but at times there are lots of reasons to consider ARMs rather than equity extraction. However, in the current market the spread between 30-year fixed and 3, 5, 7 and 10 year ARMS is so small that it makes sense for a lot fewer people these days.

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