Can you document the claim that a lot of Option ARMS will reset the next 2 years.
Option ARMS adjust 2 ways. One way is by duration - 5 years and it automatically resets. The other way is by loan amount - people who constantly pay the minimu have an increasing loan balance. If the loan balance goes too high, the Option ARM automatically resets.
In this way, many of the Option ARMs scheduled to reset at 5 years were reset much earlier because the home owner let the loan balance get too high. This is why there was a flood of Option ARM resets over the past 4 years.
If there is still a huge pool of Option ARMs ready to reset, I would appreciate some current documentation on that, and not famous bar chart of resets that is now about 3 years out of date.
Thanks.
You may be right that there are a huge number of Option ARMs ready to reset soon. My understanding is that the lions share already blew up because almost all of those owners paid only the Optional minimums, and ran their loan balances up to the trigger that caused rates to reset.
you know more about this than me.
mine was taken in 06, has 5 year fixed, and then converts to 20 yr fixed fully amortized.
this happens in Sept 2011.
i have recollections of reading about the option ARM wave of foreclosures and i have not read any contrary opinion
until now.
i sincerely hope you are right. that a lot of the option ARM’s have already been converted or refinanced or foreclosed and the balance remaining will not cause another depression in the housing market
i hope you are right.