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chrjr:
Feb 06 13:20 pm
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All Comments by feesher »What the Housing 'Apocalypse' Prophets Aren't Revealing [View article]
ARM's are what, 2-3% plus LIBOR after the reset. Current 1 year libor is 2.82, giving me a reset today of 4.82-5.82. Given further rate cuts, yeah maybe the rest rates are getting closer to the initial. This is not true, however, for the 2/28's and interest only ARM's that have the P part of P+I coming at reset.
Your point only holds water for P+I ARM's, but even then LIBOR must stay low for how long? 30 years? Oh, and home prices cannot slide any further.
Your point does not hold water for interest onlys and 2/28.