Mortgage Resets
This chart from Credit Suisse via the IMF shows the heavy subprime resets in 2008, plus it shows the reset problems with Alt-A and Option ARM loans in later years.
Although many of the homeowners in the 2009 to 2011 reset periods will refinance (if they can, due to ongoing declines in home values which directly affects the "loan to value", or "LTV", making it harder to refinance than the sub-prime borrowers to date), this shows that the problems in housing will linger for several years and goes far beyond sub-prime borrowers. What is especially concerning is all these Option ARM resets in 2010 and 2011. Most of these homeowners are selecting the minimum payments (negatively amortizing) and many homeowners will be upside down when the ARM resets.
Note: "Alt-A" and "Prime" loan resets "double" and "quadruple" respectively by 2nd quarter 2009!
Again,"...ongoing declines in home values directly affects the 'loan to value', or LTV, and will make it harder for 'Prime' and 'Alt-A' borrowers to refinance than the 'sub-prime' borrowers to date!"
