"As a homeowner I'm shaking my head in disbelief as my Adjustable Rate Mortgage Loan enters it's adjustment period and I realize, for the first time, the huge increase in my monthly payment coming up." Unfortunately, this is an all too common comment being made by many people all over the country.  For the first time, there many borrowers are coming to this horrendous realization too late to do anything about it and who may be forced in to foreclosure proceedings.

How could this happen to a huge number of homeowners in a country as protected and regulated as ours? Good question and the answer is the age old motivating factor of greed.  Greed on a scale never seen before or even imagined. One wonders where the regulators were while all this was happening. The perpetrators were those companies and their brokers who set things up such that the more the broker could sell of a given vehicle the bigger the commissions and other bonuses were to be harvested.  The companies involved had apparently thrown away the rule book whereby mortgage granting activity was no longer governed by sound business practice.  

Thus the sub prime market was conceived and promoted. The result - thousands of advances made on specious appraisal values, loans made to borrowers with impaired and bad credit.The vehicles - adjustable rate mortgages with adjustment period requirements of which the borrowers were oblivious and  which require sharply escalated payments.  The result is a massive number of borrowers who cannot meet the payments and inevitably, foreclosures.  At the end of 2007, foreclosures in the US are running at an all time high and that high number is likely to continue in to 2008 and beyond. Coincidentally and possibly consequently, the real estate market in the US has tanked.  Housing starts are down, sales of existing and new units is down.  Real estate values are tumbling in most areas of the country especially the economically depressed areas like Michigan. Now that the crisis is here and the situation becoming more discussed by a public finally more aware. many homeowners are anxious to refinance their ARM's before they get to the adjustment period and they are confronted with escalating payments.The vehicle of choice is the fixed rate loan for 15 , 20 or 30 year.  Fixed rates are at their lowest point in the last two years.  While rates are expected to remain low, a majority of real estate pundits are predicting that rates will begin to rise soon. If you have an ARM, seeing that the home market in most areas is still dropping, you will probably want to investigate  refinancing with a fixed rate loan. If you are a good to excellent credit risk, have a home value that is at least 80% of the amount to be refinanced and a debt to income ratio that's healthy, you stand a good chance of receiving a fast approval.  Only deal with a lender who has impeccable credentials and is knowledgeable about your locality.  A local banking institution might be your best choice.  They probably know you and the area in which you live and are used to lending there.