New wave of mortgage resets coming

Today’s Chicago Tribune had an article by Renae Merle entitled “Hot time for ARM resets this summer.”

According to the article, the summers of 2005 and 2006 were a hotbed of subprime lending, with rates scheduled to reset after two or three years. This indicates a new wave of resets are due about now, with another (smaller) wave coming next summer.

Mortgage rate resets will spawn more foreclosures.

Nationally, more than 300,000 ARMS will reset this summer, and with declining home values, owners have few options.

I am convinced that the real estate market won’t turn around until foreclosures decline. June data showed a slight increase over May, but this trend may not last.

Meanwhile, foreclosed homes can be excellent investment opportunities for buyers with sufficient cash and/or credit. The rental market continues to improve, with vacancies dropping to pre-2001 rates. Call me! 847-949-6045