by Bill McBride on 5/20/2009 09:44:00 AM
Wednesday, May 20, 2009
Matt Padilla at the O.C. Register presents a new reset / recast chart from Credit Suisse: Loan reset threat looms till 2012
Credit Suisse is using recast dates for Option ARMs and reset dates for all other loans.
As Tanta noted: "Reset" refers to a rate change. "Recast" refers to a payment change.
Resets are not a huge problem as long as interest rates stay low, but recasts could be significant.
Note that Wells Fargo expects only a small percentage of their $115 billion "pick-a-pay" Option ARM portfolio they acquired via Wachovia (originally from World Savings / Golden West) to recast by 2012 (because Golden West had very generous NegAM terms). I'm not sure how that fits with this chart.