ARMs Prove They Have Cleaned up Their Act

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Posted To: MND NewsWire

In August, MND published a summary of an analysis of the current state of the adjustable rate mortgage (ARM). CoreLogic’s senior professional economist, Archana Pradhan, wrote that while the product’s best days are behind it, the near demise is probably only temporary . The ARM share of mortgages, which reached a peak of 45 percent in mid-2005 now fluctuates between 5 and 13 percent, rising and falling with interest rates. Even at that, it is a decent recovery from the low of 2 percent it reached in mid-2009. ARMs are more common among homebuyers with large-balance loans, making up 47 percent of loans over $1 million that were originated in the first quarter of this year. Further Pradhan said, as rates increase, the ARM will undoubtedly rise again. Therefore, and especially given the role those…(read more)

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