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Posts Tagged ‘mortgage resets’

Aren’t you glad 2009 is over?  So many foreclosures, 10% unemployment, so many houses underwater.   2010 has to be better right?    Some realtors and economists are predicting better times for real estate in 2010.  I really want to believe them.  I really do.  But what about the coming mortgage loan resets that will start about mid 2010?

As many know we just went through a period of massive defaults on subprime loans. When housing prices stopped going up and people starting losing jobs, many of those loans became worthless.  However we are still facing another period of possibly the same thing.  Many ARM (adjustable rate mortgages) are due to reset in 2010 with the peak in 2011.

Here’s a picture from a report from the imf (international monetary fund).

Mortgage ARM Loan Resets

Mortgage Rate Resets

So far the banks have not been very accommodating to borrowers.   Troubled borrowers have reported it is difficult to convert the temporary modifications from the government’s Housing programs to permanent programs.  Only 9% of mortgages have been modified. And adjusting the principal value … which is what is really needed here .. forget it, they would rather foreclose.

So unless the banks take proactive action with the this coming wave of Option ARM and Alt-A mortgage resets, housing isn’t out of the words yet.

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