Concerns of a new wave of problem loans caused by unsustainable rate resets on adjustable-rate mortgages (ARMs) are largely unfounded, according to Lender Processing Services (LPS).
LPS conducted an in-depth analysis of the outstanding hybrid ARM population and found that the majority—63 percent—have already reset from their initial rates.
Of the remaining 37 percent that have yet to reset, three-fourths were originated in post-crisis years when lending criteria was tighter and most new loans went to borrowers with credit scores of 760 or above—an attribute that LPSsays suggests they are less likely to default in any type of scenario. Learn more ...
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