AP Title: Foreclosures may jump as ARMs reset
My Proposed Title: Foreclosures
Here are some highlights from the article:
This year, more than $300 billion worth of hybrid ARMs will readjust for the first time. That number will jump to approximately $1 trillion in 2007, according to the MBA. Monthly payments will leap too, many beyond what homeowners can afford.The increase in the number and dollar amount of adjusting ARMs over the coming years will be a significant factor in driving housing prices down. Some of these properties will go into foreclosure, while ohers will be sold by the owners in attempt to escape foreclosure.
"ARMs are a ticking time bomb," said Brad Geisen, president and chief executive of property tracker Foreclosure.com. "Through 2006 and 2007, I'm pretty sure we'll see a high volume of foreclosures."
Last year, foreclosures hit a historical low nationwide at about 50,000. But that number has more than doubled since then, according to Foreclosure.com.
It is indeed sad to watch naive home buyers, who just wanted a house to live in, forced out due to adjusting mortgages. People should be more informed. It is after all, most likely, the biggest purchase of one's life. Yet, at the very same time, mortgage brokers have a responsibility to lend responsibly.