Ticking Time Bomb?

" The Federal Reserve trying to get credit flowing again by extending several key programs for large banks programs like emergency lending for investment firms. Temporary swaps for risky investments. They originally set to expire at the end of January but. Will now stretch through the month of April. But another major crisis could unfold before them by the end of this year more than 250 billion dollars worth of adjustable rate mortgages or arms. Will go up to higher pay monthly payments these mortgages were at the heart of the housing crisis. That led to the full blown blown credit crisis lot of people have adjustable rate mortgages and they're prepared what's coming up. They know their rates are going up they may refinance or whatever but some folks aren't. Those mortgages are designed for folks who may not be able to get more traditional on the mortgages start with a low interest rate they can dramatically increasing use it stops along the way. It means monthly payments will most likely go up now and it can't afford it foreclosures could be the next step with -- investment. -- And associates a lot I'm not an arm coming up you know I a lot of people have arms coming up he recognized that all get to do if you have good credit. And need you to not overblown with the amount of money that you you said your house was worth. He just refinance into fixed rate going to go but everybody and have that situation."

" Yet the big problem is shot it's not the people that can't afford these up arms as they go up it's the people that can't I gotta tell yet. They are massive amounts of people that got loans that shouldn't happen and no programs really can help I have to tell you show up if the banks and lenders came in and said you don't what don't even pay us any interest -- pay -- principle will lol you're what your payment is. There are so many people that are 25%. Underwater around what they paid on the house and still can't pay it off. We just got to get through this it's going to be a big washout process I think another couple years. And I think it's going to suggest they painful to be about timing and price and no government program I think it's gonna fix things up right I'm."

" Want to go through the reality that we're facing again by the year end of this year 2008. Across the United States more than 250. Billion dollars worth of mortgages will reset. And then between 9 and 2010. Another 700 billion dollars in mortgages will reset now in some cases. You have stops along the way for instance if your playing -- 6% interest. You can only go up to seven are only go up to eight or something like that everybody doesn't have that and along the way so many people's homes are worth less than they have been them. That there are web sites and companies which are teaching people how to walk away from home is that going to be the reality coming up here."

" You bad -- I think the big story right now is people taking the keys and -- dropping off on their doorstep on the banks and say. On out here he just got to realize so when people buy a house with 300000. It's now worth 250 and expectations of between forty and you're just paying money into a black hole and you feel -- ripped off by a land there. You're going to tend to do that and that's the feeding on itself that we've been seeing over the last couple years. Which is forcing housing prices that come down as inventories continue to build up. And for me I'm just not seeing any end in sight as I said he'll eventually price will come down and up with people start jumping in because they find is a great value. Then we're gonna get torn in the market no government programs going to change this dynamic right now Gary countdown fox business news contributor thanks."