ARM's Worries Affect Stock Market

It has been a bit of concern to everybody including the Fed, but until yesterday it had not really showed in a way that would get the working man's attention. Yesterday it did. What was it: the concern over sub-prime loan defaults, i.e, foreclosures.

Investors withdrew from the sub-prime mortgage sector yesterday and caused a drop in Dow Jones Industrials of more that 240 points. In fact all the stock indexes were down about two percent.

Granted there were other contributing factors like retail sale profit figures being relatively small (0.1 percent) and the Mortgage Bankers Association saying that foreclosures increased 28 basis points from the third quarter which is up 25 basis points from last year.

While there forecast for sub-prime loans continues to look dour the number of houses on the market continues to increase. Prime mortgages are on the rise and buyers with good credit have a wide variety of property types from which to choose.

Hold on to your seat people the Fed's reaction to this latest turn of events could get interesting.

Read the MBAA press release

Read The Times of Trenton

Catch me here.