ARM Mortgage Reset Pain to Continue

A graph put out by Credit Suisse details the monthly volume of residential mortgages which will have their interest rates reset. The graph clearly indicates that we’re not out of the woods yet. In fact, what this graph indicates is that sometime towards the end of 2008 and early-mid 2009 we might begin to start hearing about being near the end of the sub-prime crisis.

What the graph goes on to show that is although the overall resets might slow, a large volume of option arm mortgages will be resetting shortly thereafter. These Option ARM mortgages became increasingly popular over the past 3-5 years. The Option ARM product gave borrowers the option as to how the pay the mortgage back, interest only, payment + interest, etc.

If this graph is an accurate indicator, it looks like there still remains a lot of flushing to do!

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