Comments on: The Eye of the Housing Storm http://wallstreetpit.com/11555-new-wave-of-adjustable-rate-mortgage-resets-around-the-corner Wed, 17 Mar 2010 20:48:27 +0000 http://wordpress.org/?v=2.9.1 hourly 1 By: Grant Hammond http://wallstreetpit.com/11555-new-wave-of-adjustable-rate-mortgage-resets-around-the-corner#comment-75617 Grant Hammond Thu, 29 Oct 2009 17:39:23 +0000 http://wallstreetpit.com/?p=11555#comment-75617 This graph assumes a couple of things: 1) consumers will not or cannot refinance their adjustable mortgages into fixed interest mortgages. 2) Banks will not act on converting these adjustable mortgages into fixed interest mortgages. 3) Consumers will not be able to pay their new mortgage rates should their mortgage rates adjust up. 4) The Gov’t won’t find a way to bail out the industry once again should all 3 previous items occur. I am not saying that our system is perfect, but I believe that the banking industry has learned a small lesson over the past 3 years…especially the small banks. They are all working at a feverish pace right now to convert all of their high risk adjustable loan portfolios to fixed interest loans. I’m just not that scared at the moment, but maybe I should be. This graph assumes a couple of things: 1) consumers will not or cannot refinance their adjustable mortgages into fixed interest mortgages. 2) Banks will not act on converting these adjustable mortgages into fixed interest mortgages. 3) Consumers will not be able to pay their new mortgage rates should their mortgage rates adjust up. 4) The Gov’t won’t find a way to bail out the industry once again should all 3 previous items occur.

I am not saying that our system is perfect, but I believe that the banking industry has learned a small lesson over the past 3 years…especially the small banks. They are all working at a feverish pace right now to convert all of their high risk adjustable loan portfolios to fixed interest loans. I’m just not that scared at the moment, but maybe I should be.

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