What Will Be the Impact of 1 – 5 Year Hybrid Adjustable Rate Mortgages?

Here’s a recent question I asked Blogger Rob Blake at  http://themortgageinsider.net/blog/ having read his article Hybrid Adjustable Rate Mortgage Recasting Will Cripple The Housing Market

 I’m not convinced the result will be as dramatic as he proposes, but I wonder what impact maturing ARMS are having on the Charleston Housing Market.  Maybe some of you could email me, or comment on the blog.  How many of you are selling because your the fixed period of your ARM is coming to an end and your rate is going from 4 point something to 9 point something???

“Please help me understand this.  I want to help my readers at www.allthingscharleston.com as well as my real estate clients understand what is happenning here in Charleston relative to ARM’s.  If we could do a little blog swapping, that might be good. 

Anyway, why can’t people with ARM’s just refinance?  I understand there are costs, of course, or is it that they can’t qualify for a loan with a fixed rate because the higher payment throws off their ratios?  Yet, they were qualified for this loan for an even higher payment, once the adjustable rate kicked in? 

With our huge inventory in Charlesston, how can I find out how much of that is being driven by people with hybrid arms kicking into affect?  I wonder how many people simply bought homes they couldn’t afford, thinking they would be selling in 3 to 5 years.  They’re there now, and there are just way too many people with the same idea at the same time?? 

I guess I could collect a little anecdotal evidence by asking those in my database how many of them have 1-5 year arms and are now in a bind.   My understanding is that an ARM was a good thing if the plan was to sell the home before the rate adjusted.  Is that wrong?  

Also, I think I will copy and paste this question onto my blog with a link to yours.  Just trying to help people find the information they’re looking for.  I certainly hope it’s not as bad as you are saying in terms of the economy crashing.  ”

 So, the question’s is out there.  I don’t know Rob from Adam’s house cat and I’ll certainly ask the people in know in the mortgage business the same thing.  I’m just never sure these days how many people are spreading happy gas, who’s being real, and what’s doom and gloom.   Maybe if we listen to everyone’s perspectives, we’ll get to the truth. 


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