The Second Wave: ARM's

From now to the end of the year, an increasing number of adjustable rate mortgages (ARM's) will reset to higher interest rates. This will mean huge increases in monthly mortgage payments in a very tight economy. Many would-be homeowners will not be able to make those payments.

The video below shows a chart of when these ARM's are scheduled to reset. Pause the video there & study it.

The rate climbs from now to the end of 2009, and then it drops off a little in January/February 2010. Then it begins to expand at an almost exponential rate.

Since someone normally must fall three months behind before the bank forecloses, I would guess that we will see foreclosures begin to accelerate in January, 2010.