> gg wrote: > And THIS is REALLY not good: > > The three-month London interbank offered rate, or Libor, rose 19 basis > points to 3.06 percent, its steepest gain since 1999.
More on that: About 6 million U.S. mortgages, including almost all subprime home loans and 41 percent of prime ARMs, are linked to the London Interbank Offered Rate, or Libor, according to First American CoreLogic in Santa Ana, California. ``If this is more than a flare, if the rate remains high, there is no doubt it will have an effect on resetting mortgage contracts in the U.S.'' Gumbinger said. ``Even a small bump in the one-month rate will be additional stress on the marketplace.'' Home loan rates tied to Libor are beyond the reach of Federal Reserve Chairman Ben S. Bernanke and others on the Federal Open Market Committee, which today left its benchmark interest rate unchanged. Many Libor-linked U.S. mortgages don't limit the size of a loan's first adjustment, with caps of 2 percent on subsequent changes. That means a monthly mortgage bill could double or even triple when it first resets. ``If the Libor market seizes up and stays that way, it's going to complicate everything,'' said Bill Fleckenstein, president of Fleckenstein Capital in Seattle. ``What you are seeing is the unwinding of the financial system as we know it.'' ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~| Adobe® ColdFusion® 8 software 8 is the most important and dramatic release to date Get the Free Trial http://ad.doubleclick.net/clk;203748912;27390454;j Archive: http://www.houseoffusion.com/groups/CF-Community/message.cfm/messageid:269898 Subscription: http://www.houseoffusion.com/groups/CF-Community/subscribe.cfm Unsubscribe: http://www.houseoffusion.com/cf_lists/unsubscribe.cfm?user=11502.10531.5
