Perhaps we have reached a peak in non-performing ARM loans. When they do start to decline, the number of foreclosures will eventually start to decline, then eventually the number of bank owned properties will start to decline which will lessen the intense downward pressure on prices caused by bank owned properties.
There is good news and bad news in the monthly report released Friday by option ARM specialist Downey Financial Corp. (DSL: 2.18 -0.91%). First, the good: growth in non-performing assets slowed dramatically during July, to just over 3 percent compared to June. And July’s growth in NPAs was the slowest rate this year, by far; the previous low-growth month was May’s 5.26 percent.