Will the Second Mortgage Crisis Directly Affect You?

In the middle of December, we first reported the theory of the “Exotic Mortgage Crisis.”  Unconventional loans including Alt-A and Option ARMS are the next group of mortgage loans to be reset.  Many of these mortgages could see rates change from 4% to 8% in one month.  With the struggling economy, many homeowners will not be able to find capital to pay for these increased mortgage payments.  Overall, there is $1 trillion in subprime loans, but the scary thought is that there is $1.5 trillion Alt-A and Option ARMS that will be reset within the next year all the way through 2012 as seen on the chart above.  Will this second mortgage crisis directly affect you?