Monday, September 24, 2007

Default Rates Stabilizing...For Now.

Everybody can take a deep breath. According to an American housing official, "The default rate on U.S. mortgages is stabilizing". That may be a true statement today; will it be in four months? One picture can speak a million words:


The next few months will see an incredible amount of adjustable rate mortgages reset their monthly payments. There should be a four or five month lag time, but expect default rates to correlate closely to the reset schedule above. There will be no long-term stabilization in the near future.

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