I read about the mortgage reset schedule in the Wall Street Journal and managed to find these two graphics on the web. This is very scary. There is a huge mountain of sub-prime mortgage rate resets ahead and the peak is just before the next general election. It will make this year’s problems seem small.
Defaults will increase as consumers can’t refinance or can’t afford the new rates. Foreclosures will go up. Consumer spending will slow down. Housing prices will depress even further. Bankruptcies will surge. Credit fixing businesses will make lots of money.
This will be terrible for incumbents. I wonder what the mortgage industry bail out will look like.
[tags]sub prime, mortgage reset schedule, sub-prime reset[/tags]