The subprime mortgage implosion was just the beginning.
Well qualified ARM borrowers will see their loans reset soon which will make the subprime borrowers’ default rates look like child’s play. Even though recent declining mortgage interest rates have helped ARM borrowers stay afloat, the current mortgage interest rates will not last forever and will only postponing the inevitable. The next spike in foreclosures will be ARM loans, the domino affect will take housing values with it.
But that’s not even half the picture.