If you want to discus mortgage forclosures it makes no sense to only look at those with a reset / recast and scream that the sky is falling. You must look at all the mortgages in aggregate. When you look at forclosure rates for all loans rather than looking at the forclosure rates for a subset of loans the picture is more clear as to how many are potential problem loans.
I think that is where the misunderstanding is coming in. The graph I put in is NOT depicting foreclosures, it is showing the loans outstanding that are headed for recast/reset. The presumption about a percentage of those going into foreclosure is relative to the situation/terms people will find themselves in when those loans do reset/recast.
If you truly do not believe that there will be an accompanying increase in foreclosure activity as a result of these resets/recasts, that is fine. The recent history has proven that otherwise.
No one said anything about the 'sky is falling', but this is not a 'small situation' on the road ahead.
As you pointed out in your post, we are now seeing increases in fixed prime mortgages as well. This was only originally looking at the situation for those loan types referenced in the updated graph I added. Many of those are considered 'prime' too and not sub-prime.
Not sure what the disagreement is about. More @#$* is most certainly yet to hit the fan.
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