As new as this article is, it seems like its already 6 months old. Who didnt know or even saw this coming was quite foolish. Many think the bottom is in and that goldilocks is here and a softlanding is due, this isnt the case. There will be over 1.5 million foreclosures and Trillions worth of ARMS resetting over the next 12-18 months. The bottom in housing is NOT in and will probably not see a bottom for at least 2 years or longer. I believe this will be worse than the last real estate dip back in the late 80's early 90's. 'Tsunami' of adjustable-rate mortgage resets coming But higher monthly payments won't dent U.S. economy much, study says Last Update: 7:17 PM ET Mar 23, 2007 SAN FRANCISCO (MarketWatch) -- Trillions of dollars worth of adjustable-rate mortgages will reset in the next few years. That could dent consumer spending, but the wave of resets may end up being a ripple for the U.S. economy. More than $2.28 trillion worth of ARMs were originated in 2004, 2005 and 2006, at the peak of the recent housing boom, according to a study released this week by a unit of real estate data company First American. Some of these loans have already reset at higher interest rates, but a lot more have yet to reset. This year, almost $370 billion worth of first ARMs are resetting. More than $250 billion worth will reset in 2008 and 2009 and another $700 billion will do so in 2010 and beyond, the First American study estimates. Rick Chance, head of the special situations advisory group at investment bank KPMG Corporate Finance LLC, reckons recent developments are only the beginning of what he calls a "tsunami" of mortgage resets and defaults that will wash over the economy during the next few years. "That's got to have an impact on the economy and the consumers who have these mortgages," Chance said. Still, Christopher Cagan, the author of the First American study, isn't so alarmed. SUBPRIME SHAKEOUT A MarketWatch special report 'Lemming loan' alert Many Americans face losing their homes in the mortgage market's next big blowup, economists say. Foreclosing on the American Dream An era of permissive mortgage standards ends with advent of subprime-lending crisis, leaving many would-be buyers in the cold. â¢ Stabilization called far off Audio Specialists threatened Few independent subprime lenders may be left after mortgage crisis. Unlikely suspects GE, GM and H&R Block are in the subprime business -- but originators owned by these larger companies have better survival odds. The ARM resets will cost an extra $42 billion a year, roughly 0.4% of the nation's gross domestic product he estimates. (Adding some context, he notes that Americans spend much more than $100 billion a year on booze.) ARM "reset is best understood as a part of the overall business cycle rather than as a single dominant factor that will control the business cycle or break the economy," Cagan wrote. Still, there will be pain, which will be most felt in the subprime corner of the mortgage market, which caters to the poorest borrowers with the most blemished credit records. he said. The pain will also be felt in parts of the country that saw the most prevalent use of subprime mortgages and ARMs with affordability features such as teaser rates, Chance said. He works in Orange County, Calif., a previously hot housing market where several subprime mortgage lenders were based. "A few years ago, when we were in the parking lot, we'd see 20 year-olds driving Ferraris. What did they do? They all worked on the top floor in the subprime industry," Chance said. "I don't see the Ferraris anymore," he added. "This boom created a lot of wealth for a lot of people quickly. But now there's a day of reckoning and it will affect lots of households."