by Calculated Risk on 10/24/2006 03:58:00 PM

Here is an analysis, by Christopher Cagan, Director of Research and Analytics at First American Real Estate Solutions, of the impact of mortgage resets on the California market (hat tip: ild)

Click on table for larger image.

Dr. Cagan estimates the number of loans at risk due to reset and equity strain. He then estimates the potential number of defaults, and the impact on the California market (county by county). He concludes that resets:

"Will be painful but will not break the market or the economy."

Currently Cagan is estimating 266,000 defaults in California due to equity and reset strain over the next 5 years. However if prices decline, the number of potential defaults would rise.