Can Option ARMs Bear the Weight of Interest Rates?
Thursday, March 11, 2010
In a previous post, we talked about our concerns regarding the number of families in 2010 that were going to have their Option ARM mortgages resetting or recasting. The term ‘reset’ deals with the change of interest rate. The term ‘recast’ deals with the actual change in the mortgage amount. In either case their mortgage payment could be affected. And at a time of tremendous financial hardship, many families’ mortgage payments could increase… some of them rather dramatically.
Why will this be a challenge in 2010?
We only have to look at the chart below to see that many loans will be impacted over this year and next:
