From The Wall Street Journal article, "Option ARM Time Bomb Blows Early, Easing Damage to U.S. Housing" by Prashant Gopal and Jody Shenn:
This was the year thousands of U.S. homeowners with option adjustable-rate mortgages were supposed to default as their payments spiked.*** About $600 billion of the loans were made from 2005 through 2007, according to industry newsletter Inside Mortgage Finance. Of those packaged into bonds, some 20 percent have been liquidated at losses to investors, and almost half of the remaining ones are at least 30 days delinquent, in foreclosure or have been seized by lenders, according to data from JPMorgan.
“It’s not that option ARMs weren’t a bad way to finance homes, it’s just that the disaster already happened before the resets,” McCarthy said in a telephone interview last week.
Behind such default there are several reasons like effect of crisis ,weak market situation, people's bad financial position etc. It was expected .
ReplyDeleteIt is truth that the types of mortgages, subprime, ARM, or high interest rate payments are not the cause of our high rate of mortgage defaults or housing price decline.Very updating post you have shared.
ReplyDeleteInfroamtion is written about defalut rate of mortagge rates.Bad financila postion,weka market situation are some of the reason behind the default.
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