Starting to get some real numbers and problems from real estate and mortgages, and the real numbers are horrible. Understand, people borrowed at a teaser rate (low low low) which then "resets" at the real rates forty months later. Problem is that at reset time on a 200K mortgage on a 220K house that the value of your house is now worth about 160K. So while a borrower may have been paying "interest only" for forty months the amount of the loan has risen from 200K to 250K....See that? On a home worth $100,000 less than owed. In other words your "reset" (actually a recast) is for more money at higher interest. Your new payments will go up 200% while the value of your home has deteriorated 30%. You are belly up with almost no hope of becoming whole again.

This compared to the great deal of buying a HD TV from Best Buy with no money down and interest of only 1% with no payments due for 1 year. This is great IF you pay off the entire amount you owe on the TV before a time certain (1 year). If you don't pay before you are supposed to, all the real interest is tacked on to the TV price and you now have to pay a real rate on a vastly more amount "owed" for the TV. Payments can go from zero per month to several hundred per month.

Herb Greenberg lays it all out HERE