Readers suggested a topic on the adjustable rate loan resets. "An analysis of the ARM reset chart. We are getting close to the top of the first bump, and things are already pretty bad. Yesterday, someone said that Goldman has another chart that shows a different pattern and that we aren’t as close to that first peak as we thought."

"The chart only deals with first resets. What would it look like if subsequent resets were included? The MSM reports seem to indicate anecdotally that people can sometimes handle the first reset with difficulty, but later ones are just too much."

"What about the option ARMS? There was a report recently that they are starting to reset earlier than expected because people were making the lowest possible payments and hitting their equity limits. Aren’t the option ARMs a huge part of the second bump of the chart? What happens if they really do kick in ahead of schedule? Is it just more of the same? Something else going to happen?"

Another added, "It would be good to see a current chart. We’ve all been referring to that one chart that came out in January, and talking about the two peaks etc. - but I suspect that the peaks in that chart are somewhat transitory."

"There are new ARM loans being done all the time still, which would serve to shift things back continuously - the peaks will always be yet to come - we will never reach them. You can only tell when the real peak happened by looking back at when the resets actually happened."

One posted this, "(**PDF Alert**)Here’s the link to the Goldman charts. Goldman’s chart show the resets peaking in March 2008."

"I think the difference in timing between the Goldman and Credit Suisse charts has to do with their respective release dates. The Credit Suisse charts were released in March 2007, while the Goldman charts were just released in October 2007."

"Back in March 2007, subprimes were still alive and kicking giving some of borrowers facing early resets time to refinance and extend their eventual doom. I could be wrong, but I imagine that’s why there is a discrepancy between the charts."

From the report: "2. What happened in 2004? The relationship between Californian house prices and disposable income as a multiple of long rates broke down in 2004; we believe that aggressive sales of 'affordability products' (e.g., subprime, option ARMs, home equity loans), which spiked in 2004 (see Exhibit 2), drove Californian home prices well-above levels supported by economic conditions."

"Now that the secondary market for these affordability products has all but evaporated, we expect home prices in California to return to normalized levels (i.e. levels implied by current and forecast disposable income in California as well as U.S. ten-year treasury yields); this implies a 35-40% fall."

"As of last August the median house price in California was $589K, but economic conditions support prices between $350-380K (see Exhibit 1); material price declines are likely, in our view."

One poster said, "I noticed this on happenstance of daily data mining. The issue of pushing the time of danger forward creats a false sense of security for the lawdogs to pander to the public, while cutting backroom deals and floating trial balloons in the press."

The Wall Street Journal. "Struggling homeowners seeking mortgage relief from their lenders say they are hearing a tough message: We can't help you unless you first fall behind on payments."

"As past-due home loans keep piling up -- and some two million adjustable-rate mortgages prepare to adjust higher in the coming year -- mortgage companies are reaching out to borrowers in hopes of fending off foreclosures. On the other hand, they remain wary of cutting the interest rate, extending the term or forgiving debts, as long as borrowers are still current on their payments."

"'In general, the mortgage company wants to see a consumer default on three separate payments before considering a loan modification,' says Elizabeth Schomburg, senior VP of the Family Credit Counseling Service in Chicago."

"Gail Cunningham, a spokeswoman for the National Foundation for Credit Counseling, says its member agencies in areas from Southern California to Texas have seen the same trend. 'One counselor in Amarillo, Texas, just told me 'It seems to me they almost encourage people to fall behind in order to find help,' Ms. Cunningham says."

"Mortgage companies, on the other hand, often point to the way home loans are sold and packaged today as the key factor that complicates their efforts to help borrowers. Most mortgages are no longer owned by the companies that originated them, but are funneled into securities and sold to investors world-wide."

"As a result, mortgage servicers, who collect payments on the loans for a fee, often define their responsibility as maximizing returns for the investors for whom they service the loans."

"Mortgage servicers have to make sure they can 'defend' the actions they take to help prevent foreclosures, said Steve Bailey, head of Countrywide's loan-administration division, in a recent interview. Often, he said, those investors ask: 'Are they truly not able to pay?'"

"Still, Mr. Bailey said, 'To recommend someone to not pay is a bad recommendation.'"