Option ARM timebomb set to explode....

System

mbga9pgf wrote: »

Or are you a bit thick?

The irony :rotfl:

Tell you what chum, you cling on to your little out of date graph and spend the next year worrying about mortgages in the US while others get on with their lives.

System

Generali wrote: »

what data do you have to show to back up your argument given policy responses over the last couple of years?

Clearly you missed the graph produced in January 2008!!!one It's posted every day so it must be true, what more do you want?

StevieJ

donaldtramp wrote: »

There is no point conversing with half wits. Stevie responds to most posts I've seen with a lot of nonsense. Trying to make halfwitted "joke" comments just emphasise the lack of intelligence.
Stevie, if you can't understand, Butt out, there is no point in trying to wind up people.

Get back to your council business

It looks like it is about time to dig this guy out again, I guess he should know a bit about the subject :rolleyes:

And the homeowners who are holding option ARMs when the wave of resets hits won't face as big a shock because interest rates have fallen, adds Fratantoni. "Interest rates have come down to the point where the resets that are going to occur are going to be a bit of a non-event," he says. "Very few borrowers will experience the recast.

says Mike Fratantoni, senior economist with the Mortgage Bankers Association of America. :rotfl:

StevieJ

mbga9pgf wrote: »

Yes, with the products that were issued with 1% teaser rates, with a product you could make payments that didnt even cover the interest for the first 5 years... Those resets are now due. Most of which (80%) are facing mortgage payments of 110-125% of the original loan.

See the significance? Or are you a bit thick?

It is not as easy as on the HPC site is it They must be all brainboxes on there.

mbga9pgf

Everyone seems to be forgetting we are at the bottom of the cycle at the mo, as soon as rates creep up just a smidge, the rate at which these mortgages will reach reset will increase.

Tell you what purch, why not look at this one then from a month ago...

says Mike Fratantoni, senior economist with the Mortgage Bankers Association of America.

Like he is going to admit to the major problems on the horizon? Its like asking an MP whether they think their current expenses system is fair!!!

Generali

mbga9pgf wrote: »

How does 40% doodle do you then?
http://online.wsj.com/article/SB121798100185115205.html?mod=yahoo_hs&ru=yahoo

Edit: sorry, 40% default rate. Still pretty serious. As I said, an increase of between 60%-102% overnight (which 80% of these mortgage holders face) is a bloodbath waiting to happen. The figures are out there, in trustworthy articles and are widely knoiwn about.

That's an article that's the best part of a year old! Things have changed a lot since then.

Look, I'm posting from Aus. The Test is on the TV and I'm taking the kids to swimming lessons at 7am tomorrow. Take a deep breath and have a look for some proper evidence about what has been going on in the past quarter.

StevieJ

Generali wrote: »

That's an article that's the best part of a year old! Things have changed a lot since then.

Look, I'm posting from Aus. The Test is on the TV and I'm taking the kids to swimming lessons at 7am tomorrow. Take a deep breath and have a look for some proper evidence about what has been going on in the past quarter.

The reds are on as well, still 0-0,and three time champions - again.

mbga9pgf

Generali, the following from BW answers your questions in terms of policy response and effect of lower rates. All the measures have done is delay the inevitable at maximum 12 months. They have shoved the debt further to the right.

Third of Loans Deeply Delinquent

Credit Suisse (CS) estimates (click here to see the chart) that the resets will begin to accelerate next spring, rising from about $4 billion resetting in March 2010 to a peak of $14 billion in September 2011. The current level is about $1 billion. About $500 billion of option ARM loans are outstanding, according to the bank. "Things have gotten pushed out," says Chandrajit Bhattacharya, director in U.S. Mortgage Strategy for Credit Suisse. "Right now it looks like the big increase is probably going to be somewhere toward the middle of next year."
Option ARMs typically reset after five years, at which point the monthly bill increases 65% or more. About 37.5% of option ARMs originated in 2005 are still outstanding, 63% of the 2006 vintage are outstanding, and 82% of the 2007 loans remain, according to Barclays Capital (BCS). And about a third of the outstanding loans in these years are deeply delinquent.

Article is a month old

mbga9pgf

StevieJ wrote: »

Get back to your council business

It looks like it is about time to dig this guy out again, I guess he should know a bit about the subject :rolleyes:

And the homeowners who are holding option ARMs when the wave of resets hits won't face as big a shock because interest rates have fallen, adds Fratantoni. "Interest rates have come down to the point where the resets that are going to occur are going to be a bit of a non-event," he says. "Very few borrowers will experience the recast.

says Mike Fratantoni, senior economist with the Mortgage Bankers Association of America. :rotfl:

So steve, tell me, are banks expected to take further writedowns then by reducing principal? Or are they going to just let the mortgage debt get bigger and bigger?

Want to show me any products out there in the US where you can refinance with a 100%+ loan? Before taking into accout any equity fall due the falling prices? As I have previously said, these loans are getting bigger. 80% of these loans are getting bigger by the month due to minimum payments being made. At some stage or other, the mortgage will reset and it is going to cause complete and utter carnage. You cannot deny this. If you go from paying below your minimum payment a month, of $1000, then reset to $2000 a month, its obvious that struggling families are going to go under. It doesnt take a rocket scientist to realise that.

Generali

mbga9pgf wrote: »

Generali, the following from BW answers your questions in terms of policy response and effect of lower rates. All the measures have done is delay the inevitable at maximum 12 months. They have shoved the debt further to the right.



Article is a month old

Ok. We'll see what happens I guess.

I'd hope that the much vaunted 'stress tests' would have caught these babies. If they haven't then a lot of people will look very stupid.