Mortgage resets: the level will remain above $30 billion a month between October 2007-September 2008

http://www.iht.com/articles/2007/08/01/business/leonhardt.php

"The peak month for the resetting of mortgages will come this October, according to Credit Suisse, when more than $50 billion in mortgages will switch to a new rate for the first time. The level will remain above $30 billion a month through September 2008. In all, the interest rates on about $1 trillion worth of mortgages, or 12 percent of the U.S. total, will reset for the first time this year or next. A couple of years ago, by comparison, only a marginal amount of mortgage debt - a few billion dollars a month - was resetting each month."

I don't think we will see market effects starting in October 2007 and ending September 2008. There is going to be a 6-12 month lag per month. Some people will burn through savings to try to pay the new rate before defaulting (many refinance scenarios are impossible because of new LTV requirements and higher rates which doesn't lower the monthly payments). A lot of people won't be able to sell at market value because they will be overencumbered. Short sells will still be rejected because mortgage companies believe they can still do better with a foreclosure (they may realize this fault sometime in 2008). Foreclosures take a long time to become REOs. That's why 2009 is the absolute earliest time to buy if you can find a great deal. The bottom might not be seen until after.