Will Housing Weakness Impact the ARM Industry?

The weakness of the housing market is in the news yet again today ("Paulson: Housing Getting Worse, Banks Should Help Themselves," 10/17). This time around, though, things are a little different.

The government is jumping on the pile with comments from Treasury Secretary Henry Paulson and Fed Chairman Ben Bernanke that basically suggest the worst is not over. Paulson said that housing is the greatest threat to the economy right now.

Add to that numbers released by the Commerce Department today that show no one is building anything anymore and the curious comments by the Mortgage Bankers Association that housing is in "a deep recession" and will be weak until 2009.

So what does this mean for the ARM industry? That’s a great question, and one we’d like to pose to our readers. If housing, consumer’s primary source of net worth and wealth, continues to deteriorate, will it have an impact on front-line collection efforts on other credit products, like credit cards? Or does the downturn present an opportunity for collection agencies that specialize in mortgages?