The housing bust isn’t over yet?

I was reading an article that was stating that the “first wave” of the housing bust is starting to dwindle, but there is another, even bigger wave coming, starting in March-April of 2009. I said, “Ah, I think they may be right….but they may be wrong”. Why? You may ask would I think that. Because I am technically part of this second wave. A little bit of history, the ARM’s got real popular a little under 5 years ago, back than the 5/1 ARM’s were popular, those lasted for awhile. Then they moved into the 2yr/6month ARM’s, this is where it got even easier to get into a house. Well we will see how this second wave comes out, my personal jury is still out weither this will in fact be another wave. Reason is, the Fed has taken significant, drastic steps to lower the chances of this happening on the rate side, it is giving the homeowner every opportunity to save themselves. How? They have lowered and lowered the interest rates, hopefully affecting the rates that most of these ARM’s are tied to. But as in my case my payment will go up but my rate is actually dropping over a whole percentage point. Since I am the anal retentive type I have looked and confirmed and double confirmed all the info about the re-calabration of my loan, meaning the amortization years and interest rate will be changing. It was interesting, I called Wells Fargo, that is who my ARM is through. The first thing they said is if you are looking for a Mortgage Modification, please press ##. So I found that pretty pro-active on the Mortgage Company side, along with the govt moves to lower rates, sounds like they are preparing and handling this wave much better than the first. Hopefully with this proactive approach all parties are working towards less future foreclosures. They are giving the homeowners every chance of keeping their homes. So starting in the spring we will be hearing the results of this debate, will this second wave of 5/1 ARM’s be more responsible than the second shorter ARM’s were? I personally can’t say, but if those that got the 5/1 ARM’s had to go through 1/2 the hoops that I jumped through to get my loan we may not see the “bust” that they have been projecting. Maybe the stardards were a little tighter 5 years ago than they were 3 years ago, I don’t know, we will have to wait and see. Is anyone else in a 5/1 ARM situation and the change is doable as in our case? If you know of anyone, please have them contact me I would be more than happy to help them work through exactly what they have, it may not be such a bad deal, remember not all ARM’s are created equal.

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~ by debt2dreams on December 22, 2008.

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