MARCH 2, 2011
The history and resurgence of the adjustable rate mortgage is covered in this article, with particular focus on the 5/1 ARM. According to Mortgage Bankers Association, this product is still a good option for buyers who are likely to move within five to seven years and does not put the homeowner in danger since the reset can only go as high as 8.5%. Despite the industry’s support of these products, many buyers are opting out. Many of their fears are founded in the mortgage meltdown, which was triggered by the exploding use of ARMs.
SOURCE: CNN, 2/14/11