Longtime readers are familiar with the various iterations of this chart, showing all the resets on adjustable-rate mortgages coming down the pipe. But with the Fed keeping rates so low, many homeowners are actually seeing their payments fall.
“I don’t see much of a payment shock as long as interest rates remain low,” says Frank Nothaft, chief economist at Freddie Mac. Of course, he’s ignoring the interest-only loans… on which borrowers will have to start paying principal soon.
So it’s come to this… The Fed is bailing out ARM borrowers by skewering savers. And we suspect all it can do is put a brake on the housing market’s continued fall.
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