Les Christie, CNNMoney.com

More than $1 trillion worth of adjustable rate mortgages (ARMs) will be hit with higher reset rates this year, and that could add up to big trouble for many homeowners.
Already, the rate of serious delinquencies among subprime hybrid ARM borrowers was up to 15.75 percent during the first quarter, from 14.44 percent in the fourth quarter of 2006, according to the Mortgage Bankers Association (MBA).

The end of the housing boom changed the math when it comes to ARMs. Not only are mortgage rates higher, but lower home prices in many markets means borrowers have fewer options than they had before home prices dropped.

Most hybrid ARMs - nicknamed “explosive ARMs” - are subprime products, but, according to Doug Duncan, MBA’s chief economist, they can be useful tools for borrowers hoping to repair bad credit histories.

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