ALERT: 2010 MORTGAGE RESETS ARE DOUBLE 2008′S RESETS

The US housing market is on implosion alert!

Massive mortgage resets for 2010 & 2011 are near!

Okay, 2008’s biggest month of mortgage resets were in Sept 2008; $64 billion in mortgages reset that month, and the monthly average was $40 billion for 2008. For 2010, August is the biggest month with $97 billion in mortgage resets, and the 2010 monthly reset average is $83 billion – DOUBLE THE AMOUNT OF MORTGAGE RESETS FOR 2008!!!

FRIGHTENING NUMBERS BELOW:

Mortage resets for 2010; billions per month

Jan Feb Mar
Agency $6 $7 $6
Prime $9 $10 $11
Alt-A $12 $13 $15
Sub $13 $14 $16
Option $16 $18 $23
Total $56 $62 $71

Apr May Jun
Agency $8 $9 $9
Prime $12 $14 $15
Alt-A $16 $19 $21
Sub $17 $20 $22
Option $24 $26 $29
Total $77 $88 $96

Aug Jul Sep
Agency $10 $9 $10
Prime $14 $14 $15
Alt-A $20 $19 $20
Sub $21 $20 $23
Option $32 $27 $29
Total $97 $89 $97

Oct Nov Dec
Agency $10 $11 $10
Prime $15 $14 $13
Alt-A $20 $19 $18
Sub $23 $22 $21
Option $28 $28 $27
Total $96 $94 $89

http://bp3.blogger.com/_pMscxxELHEg/RxzD0s_7EYI/AAAAAAAABB4/ljDSXZhMG3o/s1600-h/IMFresets.jpg

The U.S. housing market beginning no later than the fall of 2010 year will start the next leg down of the housing market correction. We already know the latest date, since that is when the next spike in U.S. mortgage resets kicks-in. Without a major restructuring of current mortgages and continued cash infusion by the U.S government via continuing tax credits and artificially low mortgage rates there will be no way to stop the onset of the next leg down for the housing market.

There are two differences between the first spike in mortgage resets and the second. Not only will the second spike last for at least two years (longer than the first), but it will be much harsher. A majority of the loan resets will occur between the spring of 2010 through the summer of 2012.

Roughly 75% of these mortgages are either “option-ARM” loans, “Alt-A” loans, loans through Fannie (FNM))/Freddie (FRE)/FHA, with a sprinkle of sub-prime loans in the mix. Put another way, only about a quarter of these mortgages are “prime”. These “prime” mortgages are also experiencing their highest level of defaults in history.

The largest category are the option-ARMs, the category of loans which has already had the highest level of defaults. With the a majority of these mortgage-holders having made minimum payments on these mortgages, their monthly mortgage payments will increase to multiples of their current payments; even with interest rates at record-lows. Many of these loans are negative amortization type loans adding to the problem.

The next-largest category in this group, the so-called “Alt-A” loans were supposed to be of a better quality than sub-prime. The default rates on Alt-A mortgages approaching the levels for sub-prime. Many of the Alt-A mortgages was limited documentation loans or “liar loans”.

Then we have the agency mortgages, from Fannie Mae, Freddie Mac, and now the FHA. If the massive losses which these quasi-government entities have already suffered on previous loans aren’t enough to frighten people about the future wave of defaults coming from this source, then their current lending practices should certainly do the trick. U.S agency mortgages make up over 90% of all mortgage-funding for new home loans, the U.S. government has essentially nationalized the U.S. mortgage-market (which is insured by U.S taxpayers), but with the free-loading bankers able to act as “middlemen” - taking a cut of profits for themselves, while having zero, personal risk.

The level of risk the U.S. government is taking on with many of the FHA loans is insane. The U.S. government is taking miniscule down-payments on these mortgages, over 90% of the time less then 4% down payment is out down and with the other hand the U.S government is handing out an $8,000 check, paid for by the U.S

- Prophecy

Related Posts:

• Here’s Fitch analyzing what’s about to happen to Residential Mortgage-Backed Securities values once the fed pulls out the scaffolding:
• Distortion of reality…then if anything goes wrong…taxpayers pay.
• Bernanke, Just like his predecessor, Alan Greenspan, the Central Bank has kept interest rates too low for too long.
• My own best friend is one of these “underwater” homeowners.
• The new economic storm could start as early as February.

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