This isn’t pretty.
Image from RECHARTS, click to enlarge.
This chart from Credit Suisse shows the volume of ARM resets including the option arms that have been popular in recent years for purchasing property in some real estate markets that are a little frothy. Chart is based on January 07 being the start point, with the number of months after January 07 listed across the bottom of the chart.
We are just entering the time period where the reset volume will be about 2.5 times the previous volume. What’s that mean for the borrowers with those loans? There’s going to be a hell of a lot of people who are going to have huge jumps in their monthly payment. That’s going to lead to increased defaults in the coming months.
I’m not going to keep posting on bubble issues, these past two posts were just to illustrate why people have been saying the number of foreclosures is going to be going way up.