More than $140 billion worth of adjustable-rate mortgages "adjusted" upward in America in 2007 and that figure will be dwarfed in 2008. As a former loan officer it seems morose to me that the mortgage industry calls these "adjustments". An adjustment is when a mortgage-industry fatcat shifts his considerable weight in a comfy leather chair. When your mortgage interest rate leaps by several points, raising your monthly payment by several hundred dollars or more, it is not an adjustment. It can trigger a personal disaster brought on by corporate greed and virtually nonexistent government regulation.

Mortgage companies have put people in these horrible situations through institutionalized, systematic fearmongering. Actually though, a great many more homeowners qualify for good deals on refinancing than the industry would have you believe. Let's run through a hypothetical scenario. The appraised value of your home is $250,000. You have a $190,000 first mortgage that adjusted two months ago, costing you an additional $300 per month. You also have a $20,000 home equity line of credit (HELOC). You made the newly adjusted mortgage payment the first month, but due to the increase you went 30 days late on the second. A lot of people would say you've used a dangerously high percentage of your equity and you're headed toward foreclosure.

Actually though, if your median credit score is over 600, you're still very creditworthy to the surviving subprime mortgage companies, provided that you can go "full doc". If you can't meet the standard Fannie Mae guidelines for debt-to-income ratio, you're still eligible if you can prove with bank statements that your income is at least double your monthly obligations to your mortgage, car loan, credit card minimums and any other debts that appear on your credit report. You will qualify for consolidating your first mortgage and your HELOC into a 2-year ARM around 8.8% (in a development that I consider criminal, subprime lenders have largely discontinued options that would allow you to got that loan at a fixed rate for an increase to the rate of around 0.75%). A few years ago, 8.8% would have been considered a high rate, but with ARMs adjusting to 11, 12, 13% and higher, an offer in the 8-9% range it can mean the difference between refinancing and foreclosure.

Don't let anyone tell you that you're going to lose your home and there's nothing you can do about it. You will never hear me plug a particular mortgage company in this blog, but if you post a comment describing your situation and I find a program that can help you, I will let you know. Be sure to provide the following information:

--Value of your home
--mortgage rate, term (15, 30, 40 years, etc.) and monthly payment
--cost of monthly obligations that appear on your credit report, such as car loans and credit card minimums
--credit score and income for you and your spouse, if applicable

Fire away.