Vulnerability is particularly acute in California, where, last month, nearly 75 percent of home buyers used adjustable-rate mortgages. Such loans ratchet up payments if a benchmark interest rate increases, a situation experts say is extremely likely.
Concerns extend to the health of the lending industry, the keystone of the national economy. Analysts worry that a recession, a sharp rise in interest rates or a big drop in home values could trigger thousands of foreclosures as families lose the struggle to keep their homes after job loss, illness or overwhelming jumps in payments.
http://www.nctimes.com/articles/2004/09/12/business/news/20_22_079_11_04.txt
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