As bad as the foreclosure problem has been, it’s apparently ready to get worse, according to this article in the New York Times (“Loans that looked easy pose threat to recovery“).
All the adjustable rate mortgages (“ARMs” for short) we’ve been hearing about are getting ready to re-set over the next four years, and that spells trouble for New York homeowners facing financial difficulty. Over 600,000 ARMs are expected to re-set, according to First American CoreLogic.
“This was a loan meant for sophisticated investors, or people who expected their cash flow to increase over time,” said Elena Warshawsky, a residential credit analyst with Barclays Capital, which expects 81 percent of the option ARMs originated in 2007 to default, with many ending in foreclosure.
Of course, this will affect not only people with ARMs facing foreclosure, but everyone facing mortgage problems since the banks will now likely be in a less secure positions themselves not to mention being overwhelmed by all of the foreclosure and loan modification work.
If you’re a New York homeowner facing mortgage problems, foreclosure issues or considering bankruptcy in New York, please feel free to contact me for a free initial consultation to ask questions and get an assessment of your situation. It’s a difficult situation, but there are options for dealing with it. And the best way to make sure you know all of your options is to sit down with an experienced bankruptcy attorney.