When ARMs adjust
One recurring question from readers is about adjustable-rate mortgages, and how many have yet to "reset" -- to adjust upward for the first time after the temporary fixed period.
I went to First American CoreLogic for the answer. This is what the real estate information provider provided:
Most subprime ARMs in the Baltimore metro area have already reset -- 80 percent of them, to be exact. Most of the rest are due to reset by the middle of next year.
But many prime and "Alt-A" ARMs -- Alt-A referring to mortgages in the gray risk area between prime and subprime -- have not yet reset.
That's true for two-thirds of the Alt-A borrowers in the metro area with ARMs, First American says. Some are due for resets soon, but the biggest group -- 35 percent -- isn't scheduled to adjust until at least the middle of 2011.
Four out of every five Baltimore-area prime ARMs, meanwhile, haven't reset. Nearly half aren't due to reset until at least the middle of 2011, First American says.
A little bit of added perspective:
Half of the metro area's subprime mortgages are adjustable-rate. Many Alt-A loans are ARMs, too -- 44 percent. But just 7 percent of the prime loans in the metro area are ARMs.
All told, First American estimates, the reset clock is ticking down on about 30,000 ARMs in the Baltimore metro area.