October Heavy With ARM Resets
Starting this month, October, a heavy schedule of ARM ( adjustable rate mortgage ) resets start that will continue until at least mid 2008. Between now and next July the estimated number of ARM resets will be about 2,500,000.
That means that an additional 2,500,000 mortgage holders will face the pain of sharply higher monthly payments on their housing mortgages. What many ARM mortgage borrowers did not understand at the time they closed on their loans is that many reset rates are tied to LIBOR rates rather than to the US fed funds, discount, or prime rate.
