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Adjustable Rate Mortgage Reset Schedule (GRAPH)

By
Mortgage and Lending with Benchmark Mortgage of Louisiana

ARM graph

This graph is a good indicator of what is to come (and when).  It shows that subprime ARM resets will hit their peak in the next few months, while the Option ARMs, Prime ARM, and Alt-A ARM resets will peak in the next 36 months or so.

The sheer numbers are staggering, especially in the subprime market:  $35 billion in subprime ARMs will reset in the coming months, and I believe that these are the problem loans.  I'm sure that a sizeable amount of these loans are high LTV mortgages, and in a declining market, these loans will be nearly impossible to refinance, whether FHASecure is available or not.  Keep in mind that HUD estimates that only 250,000 borrowers will be able to qualify for FHASecure.

I guess the good news is once we get past the next 6 months or so, the market should be in better shape.  Most Option ARMs, Prime ARMs, and Alt-A ARMs have lower LTVs and higher credit scores, and for the most part, these borrowers should be in a better position to refinance to a fixed rate.

Comments(10)

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William Johnson
Retired - La Jolla, CA
Retired
Excellent Graph. I had written on the several times. I wish I had used a graph,:-) Nice post! We will get through this and we will see the market pick up by the end of next year if not sooner, especially if Bernanke does the right thing next week. Lower the rates.
Sep 12, 2007 05:44 AM
Candy Henthorne
Results Realty - Spring, TX
Spring Texas Real Estate

Great post and I too like the graph.  I think it will help some when the media hype slows down on the subject.

Sep 12, 2007 06:00 AM
Gareth Bourriague
Benchmark Mortgage of Louisiana - Baton Rouge, LA
Benchmark Mortgage
Thanks for the comments guys!
Sep 17, 2007 06:41 AM
Steve Hula
All Star Real Estate - Clarksville, AR
All Star Real Estate - Team Hula
My 2 cents ... Personally, I feel that I was just kicked in the face when I heard that $20 Billion in tax payer backed funds were used to bail-out a Wall Street Investment Banker.  Surely this money could have been better spent if it had gone to pay the refinance fees to get everyone with an ARM, no matter what their current credit rating or how far they may be behind in their current ARM mortgage payment, out of their ARM and into a 30 year, FHA fixed rate mortgage!
Mar 18, 2008 02:12 PM
National Relocation
Real Estate, Movers, Realtors, Mortgages, Homes for rent - Kailua, HI

Great post and I really like the graph :-) You can see current mortgage rates from lenders across the nation on our site. Pretty fun stuff :-)

Aug 27, 2008 02:17 PM
Wanda Promes
Sioux Falls, SD
Mortgage Loan Originator

Very helpful in tracking traffic potential for refinance of these ARMS!

Great day,  Wanda

Oct 23, 2008 09:39 AM
Emerald Coast Realty
Emerald Coast Realty - Pensacola, FL
Realtors

Well it looks like we are now past the majority of the subprime resets but we have three more years of resets ahead!

www.gibbons-realty.com

Nov 29, 2008 10:17 PM
Mobile Austin Notary
Apostille/Authentication/Embassy Legalization, Notary Public, Loan Signing Agent & Process Server Services - Austin, TX
www.mobileaustinnotary.com

Thanks for the great information.Butterfly

Dec 06, 2008 12:59 AM
Gabriele Buonacorsi
Coldwell Banker Premier Realty - Henderson, NV

THANKS FOR THE GRAPH, IT IS HELPFUL.

Oct 19, 2009 05:04 AM
Kevin Cottrell
Austin Real Estate Today - Austin, TX

Thankfully, foreclosures are not a major factor in the St louis market. 

Jan 20, 2010 09:58 PM