October a scary month for many but not because of Halloween: the ARM resets are here

http://money.cnn.com/2007/10/16/real_estate/October_resets/?postversion=2007101714  

Mortgage resets: a rude awakening

Ignorance may be bliss, but it could mean a lot of pain for all the players in the subprime crisis when a record number of adjustable rate mortgages reset.

By Les Christie, CNNMoney.com staff writer

October 17 2007: 2:40 PM EDTNEW YORK (CNNMoney.com) — About $50 billion in adjustable rate mortgages reset this month, driving interest rates up for many borderline borrowers. And despite efforts to raise awareness, it doesn’t look like anyone is really prepared for what’s to come.“I don’t know if there’s anything much [borrowers] can do,” said Keith Gumbinger of HSH Associates, a publisher of mortgage related information. “Hopefully, they’ve been prudent about preparing for it, building a nest egg or refinancing the loan.”

According to a survey conducted last month for the AFL-CIO by Peter D. Hart Research Associates, three quarters of borrowers have little clue about how much their payments will increase when their loans adjust. Nearly half don’t know how their loans actually reset.“This survey shows that many homeowners simply are not prepared for the steep rise in mortgage payments that this market inflicts on ARM holders,” John Sweeney, president of the AFL-CIO, said in a press release. [click on above link to read full story]