When will majority of ARM resets happen?

[pnilesh]

Hi All,

I am patiently waiting for the house prices to come down to our affordability level. I am curious to know when bulk of ARM resets in San Diego county will happen. Any ideas? Will it happen in 2007 or 2008 or 2009?

Do you know the impact of ARM resets? Will it push San Diego County’s economy in recession?

According to you what percentage of distressed sales will we see in coming months/years?

[stansd]

http://www.autodogmatic.com/forum/viewtopic.php?p=1226

Subprime ARM resets are really starting to heat up now and will continue for about the next 18 months. Then there will be a second wave (though less subprime)starting in about June of ’09

[stansd]

http://www.autodogmatic.com/forum/viewtopic.php?p=1226

Subprime ARM resets are really starting to heat up now and will continue for about the next 18 months. Then there will be a second wave (though less subprime)starting in about June of ’09

[PerryChase]

There’s another excellent chart.

http://bp1.blogger.com/_nSTO-vZpSgc/Rme8yHvw2iI/AAAAAAAAAz0/911CnD77NNU/s1600-h/mortgage-resets.png

[PerryChase]

There’s another excellent chart.

http://bp1.blogger.com/_nSTO-vZpSgc/Rme8yHvw2iI/AAAAAAAAAz0/911CnD77NNU/s1600-h/mortgage-resets.png

[4plexowner]

The second wave of resets includes a large chunk of OptionARM loans

These loans give the homedebtor three options:
1. pay a fully amortized payment
2. pay an interest only payment
3. pay a minimum payment and add the unpaid interest to the balance of the loan (negative amortization)

Given what I know of the American consumer, most people holding these OptionARMs have used option #3 at least once and many of them have been doing so since the loan originated

Many of these homedebtors will be hugely underwater when reset day arrives and ‘mailing the keys’ will be the most sensible option for them to take (the sheriff will help them see the logic if necessary)

Prime or sub-prime isn’t really the issue – the issue is buying a house you can’t afford

~

IMO, PerryChase painted an excellent picture recently of how this correction is likely to unfold – ie, things continue to be ugly through 2010 when general panic and capitulation sets in

I believe these OptionARMs are going to cause / contribute to the panic / capitulation because they will be coming on the market as must-sell inventory at a very bad time (for sellers)

Investors and buyers who can wait will have a field day in 2011/2012 buying distressed property – the $2 mil stuff with a view that people get so excited about will be readily available for $800K or so – entry level houses in Clairemont will be $275-325K

That’s my story and I’m stickin’ to it …

[4plexowner]

The second wave of resets includes a large chunk of OptionARM loans

These loans give the homedebtor three options:
1. pay a fully amortized payment
2. pay an interest only payment
3. pay a minimum payment and add the unpaid interest to the balance of the loan (negative amortization)

Given what I know of the American consumer, most people holding these OptionARMs have used option #3 at least once and many of them have been doing so since the loan originated

Many of these homedebtors will be hugely underwater when reset day arrives and ‘mailing the keys’ will be the most sensible option for them to take (the sheriff will help them see the logic if necessary)

Prime or sub-prime isn’t really the issue – the issue is buying a house you can’t afford

~

IMO, PerryChase painted an excellent picture recently of how this correction is likely to unfold – ie, things continue to be ugly through 2010 when general panic and capitulation sets in

I believe these OptionARMs are going to cause / contribute to the panic / capitulation because they will be coming on the market as must-sell inventory at a very bad time (for sellers)

Investors and buyers who can wait will have a field day in 2011/2012 buying distressed property – the $2 mil stuff with a view that people get so excited about will be readily available for $800K or so – entry level houses in Clairemont will be $275-325K

That’s my story and I’m stickin’ to it …

[sdrealtor]

2011/2012 sounds about right for a time to reach the bottom. Don’t know about great view properties for $800,000 though that would be awesome. If it get’s there I know that I’ll be buying at least one of them.

[sdrealtor]

2011/2012 sounds about right for a time to reach the bottom. Don’t know about great view properties for $800,000 though that would be awesome. If it get’s there I know that I’ll be buying at least one of them.

[Author]

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