In this article, the author discusses the Alt-A mortgage resets, which are expected to peak in 2009-2010. Essentially the author argues another risk uptick is in the offing which will throw a bunch of currently healthy people in a mess, particularly in a worsening economy. Not sure how credible the data is.
If this is true, can this averted? Well, maybe. One difference between the Alt-A resets and the subprime mortgage resets is the ability of the borrowers to refinance. If the US government is able to get Fannie Mae and Freddie Mac to lower refinance rates and create sufficient liquidity, some of the impact of the reset may be offset. If, if, if ...
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