0
New Wave of Foreclosures Expected in '09
ARM holders will see payments soar as their mortgages reset
By Harry Kimball
|
Posted Jun 7, 08 10:44 AM CDT
|
Share
(Newser)
–
America’s subprime victims may have grudgingly accepted their fate, but there’s a new class of borrowers primed to suffer, BusinessWeek reports. Homeowners who took out ARMs, or adjustable rate mortgages, will soon face skyrocketing payments as their loans reset. About a million people have the mortgages, but only a small number have already fallen due. “It's a ticking time bomb inside your house that you can't get rid of,” one insider said.
“Most of the public is thinking that the subprime thing is over, but this is another thing waiting," said one industry watcher. “The problem for these borrowers is that once you go underwater, it's very hard to refinance, and if you cannot refinance there is very little option for you.”