Check out the graph at the bottom of this Real Estate Journal article on adjustable rate mortgages. It ends up that many borrowers (nationwide, but if anything I imagine that SoCal is worse) aren’t even aware of key facts about their ARMs, such as the cap on individual or overall rate increases, how rate resets are calculated, and more. Pretty amazing.
I imagine that many of these folks never bothered to learn the facts about their resets because they figured they’d sell or refi (for huge profit, or course) before the resets ever took place. Given flat home prices and rising rates, however, that no longer seems like such a great plan.