Another wave of foreclosures looms

The housing market is facing the prospect of a new series of kidnappings that hundreds of thousands of subprime home variable rate as an option to force the note given to much higher payments to borrowers who had been lagging, according to a report released Tuesday by Fitch Ratings. Unable to perform Translation:invalid textAbout 70 percent of U.S. $ 189 billion in outstanding options will be reset weapons from 2011, the report indicates that a setback due to fluctuations in the housing market still struggling from the collapse of the mortgage crisis that triggered the recovery . Unable to perform Translation:invalid textOption ARMs do only by 1.3 percent the percentage of mortgages outstanding and are used by a smaller percentage of the population of subprime mortgages, according to First American CoreLogic, so the impact is not the 'be devastating. But the erosion of weapons option could be felt for years. Unable to perform Translation:invalid text\ "It makes you say that \ 's going to be named new page on a high level of foreclosures, loans to continue this fight \" said Paul Miller, an analyst at FBR Capital Markets. Unable to perform Translation:invalid textOption ARMs, also known as pick-Pay loans to borrowers to choose how much to pay each month. Almost all lenders, who made these loans 2004-2007 were chosen less interest payable. Sometimes only 1 percent of allowances to be paid. But in the end the loan, borrowers must begin paying the full fare of principal and interest, so as to make the payments. Unable to perform Translation:invalid text\ "C \ 'SA bomb for some people, \" said Brian Bethune, economist at IHS Global Insight, which indicates that banks have set aside about $ 500 billion of loans and other subprime mortgages. Therefore, the seizures have significantly reduced the number of choices of weapons in circulation. In its report, Fitch estimates that 134 billion dollars of weapons option in the next two years. It is expected that the monthly payments by 63 percent on average $ 1053 per month for direct loans to adjust this year and next, after which an increase in delinquencies and foreclosures. Unable to perform Translation:invalid textOne surprise is that many have the wrong weapons option, even before the arrest, suggesting that some of these borrowers don \ 'is a possibility, "said Sam Khater, senior economist at First American CoreLogic. In April , more than 35 percent of the weapons options were at least two months late, even if they are not restored. Unable to perform Translation:invalid text\ "These people have been problems with the minimum payment, much less with the shock of payment, when it is over, \" says Khater. Unable to perform Translation:invalid textAt the root of the problem is that many who have pulled out the weapons option has been home to bet that prices would increase. The loans have helped people buy homes when prices have reached unprecedented levels. As long as housing prices kept climbing, these channels can adjust before refinancing their loans. But when prices fell, this option is gone. Now, many people can not refinance because their homes were worth more too, thanks. Unable to perform Translation:invalid textThe most serious problems arose in states with the largest drop in prices. About 75 percent of the weapons option financed homes in Florida, California, Nevada and Arizona, where prices averaged 48 percent over the second quarter of 2006 versus the first quarter of this year fell after Fitch. Unable to perform Translation:invalid textBut to fight for people to change the downward first loan payment, refinancing probably won \ 't help to do, "said Guy caecal, publisher of Inside Mortgage Finance. \" As good as all that a refinancing to increase payments than they have today. \ " Unable to perform Translation:invalid textThe Fitch report covers only those securitized mortgages are resold securities, and are packaged. Not analyze Fitch to maintain the mortgage lenders Fannie Mae and Freddie Mac, or lenders in their portfolios. Unable to perform Translation:invalid textGiven the problems before some of the nation s \ n 've largest lender seeks to limit losses from change or to work with borrowers to refinance option ARM, which remains in the portfolio, "said caecal. Unable to perform Translation:invalid textAmong aggressive Bank of America, were JP Morgan Chase and Wells Fargo. Each has specialized recently acquired another major funder of weapons option: Countrywide, Washington Mutual and Wachovia, respectively. Unable to perform Translation:invalid textAs for securitized loans was only 3.5 percent of the loan of 1 billion, from 2004 to 2007 and amended in the reporting period by Fitch.