bubbleinfo.com

From Mathew Padilla, OC Register:

"Much press has been given to the vague looming threat posed by adjustable subprime loans.  The fear is that foreclosures, already rising quickly nationwide, will spike even higher as low introductory rates end on millions of mortgages.  Robert Lacoursiere, an analyst with Bank of America, back in June wrote a report that documented the threat, writing that “$515 billion of ARMs are scheduled to reset in ‘07, followed by approximately $680 billion in ‘08. Furthermore, of these ARMs, we estimate that subprime loans consist of $400 billion (78%) in ‘07 and $500 billion (73%) in ‘08.”

I recently got an update.

This graph from Lacoursiere’s recent update shows that reset dates on loans spread out evenly over 2008. In his earlier report, they spiked around March of 2008 and then tapered off dramatically.

I didn’t get a chance to speak with him about the trend. My guess is that some folks were able to refinance before investors cut off credit on riskier loans. Such borrowers have pushed back judgment day to later in the year (or to other years).

However, just eyeballing the chart also suggests that perhaps there are fewer loans coming due next year. Initially, he said there were $680 billion in loans coming due but I’m guessing the number has fallen significantly. I tried to get new numbers from Lacoursiere but he’s been swamped this week. If they come later, I’ll update this post."