Last year, PBS reported that hundreds of thousands of financially distressed Florida homeowners have been compelled to modify their home loans. This entailed getting reducing interest rates, but not reduced home loan principals. Those reduced interest rates have one problem.
They eventually go up–and soon.
Just like teaser rates for subprime mortgages a few years ago, these modified loans are about to blow up at a time when the US economy is hurtling toward the most severe recession since the Great Depression. This financial train wreck will strike somewhere between October 1, 2016 and the end of June 2017. See The Coming Recession: It’s Going to Be a Big One–JohnHively.wordpress.com
This goes to prove the old saying; The more things change, the more they stay the same. But in our case, the saying should be, “The more the economy changes, the worse it gets for us, the 99 percent.”