Comments on: The New Housing Crisis http://dailyreckoning.com/the-new-housing-crisis/ Economic News, Markets Commentary, Gold, Oil and Investing Strategies. Sun, 27 May 2012 09:55:17 +0000 hourly 1 http://wordpress.org/?v=3.3.2 By: John A http://dailyreckoning.com/the-new-housing-crisis/#comment-32378 John A Fri, 16 Oct 2009 14:46:02 +0000 http://dailyreckoning.com/?p=19209#comment-32378 You need to differentiate between resets and recasts. They're not the same thing. The resets in this ZIRP interest rate environment won't be an issue for those who can afford the payment (and have a job). It's the recasts that are the boogeyman. The recast can make the payment double or triple based on the prior payment history. Of course, a lot of the Option ARMs are defaulting before the reset even happens, so it may be a moot point anyway. :) You need to differentiate between resets and recasts. They’re not the same thing. The resets in this ZIRP interest rate environment won’t be an issue for those who can afford the payment (and have a job).

It’s the recasts that are the boogeyman. The recast can make the payment double or triple based on the prior payment history. Of course, a lot of the Option ARMs are defaulting before the reset even happens, so it may be a moot point anyway. :)

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