Friday, June 17, 2005

Trillion Dollar Kablooie

Volume of ARMs Adjusting by Year:

2005: $80 billion
2006: $300 billion
2007: $1 trillion

The 2007 figure according to the NY Times represents 12% of outstanding mortgages.

12% of mortgages adjusting in one year is going to be painful. Even if long term rates remain low, ARMs are predominantly written off short term rates, which have risen dramatically in the past 2 years.

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