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.

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adjustable rate mortgage
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Ambassador
1,294,162
William Johnson
RE/MAX Associates - San Diego, CA
San Diego Real Estate Voice, GRI CRS e-Pro CDPE
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 12:44 PM #1
Rainmaker
58,979
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 01:00 PM #2
Anonymous
Anonymous
Anonymous
very nice chart.  when consumers see it they will be impressed a little.
Sep 12, 2007 01:45 PM #3
Rainer
11,647
Gareth Bourriague
Benchmark Mortgage of Louisiana - Baton Rouge, LA
Benchmark Mortgage
Thanks for the comments guys!
Sep 17, 2007 01:41 PM #4
Rainer
35,118
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 09:12 PM #5
Anonymous
Anonymous
Dave

Uh, they didn't spend $20B, they loaned it and are earning interest on it...

Jun 21, 2008 09:40 PM #6
Rainer
2,648
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 09:17 PM #7
Anonymous
Anonymous
PITI Calculator

Its true that the worst of the subprime is behind us, but I don't espect the market to recover until late 2011 or early 2012. The option ARMs are coming due, and this being combined with continued loss in real estate value will extend the market depression for years. PITI Calculator

Sep 04, 2008 10:01 AM #8
Rainer
38,018
Wanda Promes
Franklin American Mortgage - Sioux Falls, SD
Mortgage Loan Originator

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

Great day,  Wanda

Oct 23, 2008 04:39 PM #9
Rainmaker
58,423
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 30, 2008 06:17 AM #10
Rainmaker
69,391
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 08:59 AM #11
Anonymous
Anonymous
mr.x

yeah! we're in much better shape now.  lol

Dec 10, 2008 12:48 AM #12
Anonymous
Anonymous
Jeff Rizdaver

I've been preaching about the hurricane of reseting ARM's for the last 2-3 years. My company had high quotas on the number of Option ARM's we needed to close on. Roughly 40% needed to be an ARM. A hurricane of foreclosures is going to hit us in 2011. William, you're in real estate and you honestly thought the housing market would be out of the woods in late 2008? What were you smoking, man!?

Dec 16, 2008 11:40 AM #13
Anonymous
Anonymous
mark schooholman

i work in commercal sector and i don't see the resets for that for 2011 has this been take into account?

Feb 23, 2009 11:11 AM #14
Anonymous
Anonymous
Jeff Rizdraver

Mark, here's a better graph illustrating the time schedule better:

http://www.doctorhousingbubble.com/wp-content/uploads/2009/06/businessweekoptionarm1.jpg

You can see that 2011 is going to be a hell of a year.

Jul 02, 2009 10:06 AM #15
Anonymous
Anonymous
Wondering

So, how many months after the peak can we expect to see foreclosures? Does anyone know the average amount of time it takes to foreclose in California? Thank you.

Sep 18, 2009 09:27 PM #16
Rainer
12,519
Gabriele Buonacorsi
Coldwell Banker Premier Realty - Henderson, NV

THANKS FOR THE GRAPH, IT IS HELPFUL.

Oct 19, 2009 12:04 PM #17
Anonymous
Anonymous
Homey

Here it comes!

Dec 13, 2009 03:39 PM #18
Rainer
21,653
Kevin Cottrell
Austin Real Estate Today - Austin, TX

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

Jan 21, 2010 05:58 AM #19
Anonymous
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Rainer
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Gareth Bourriague

Benchmark Mortgage
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