The next “leg down” for the housing market

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Credit Crunch, California Housing Crash, Florida Housing Crash, Real Estate August 26th, 2009

If you think the housing market is recovering, you are probably wrong. According to the NY Times:

First American CoreLogic anticipates 600,000 option ARMS to reset within four years.

Option ARMs, which lenders stopped offering last year, gave borrowers four payment options: less than the interest, which increases the balance every month; just the interest; the equivalent of a 30-year fixed-rate mortgage; and the equivalent of a 15-year fixed.

Three-quarters of borrowers take the minimum option, which usually expires after five years or when the balance reaches a cap, generally 110 percent to 125 percent of the original loan, according to the Mortgage Bankers Association.


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5 Responses to “The next “leg down” for the housing market”

  1. The Knowledge Lady Says:
    September 15th, 2009 at 3:30 am

    Can you say OUCH. Those numbers are a kick in the head.

  2. Brendan Sinclair Says:
    September 26th, 2009 at 4:30 pm

    I have an Option ARM tied to the MTA index. For the time being, I m okay. Once they go up, I am hosed.

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