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Post# of 275592
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BuzzOnDaBeach

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BuzzOnDaBeach

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Re: coop1m43 post# 156412

Friday, 03/21/2008 7:52:03 PM

Friday, March 21, 2008 7:52:03 PM

Post# of 275592
It's not just that they were arms, it was that virtually all of them had "teaser" rates attached as well. I have 2 good friends who are independent loan agents here in socal. They said the vast majority of those 3/1 arms here had teaser rates attached. When they adjust, they don't just adjust to libor. They adjust to libor + margin, which varies from 1.5% to 2.5% So if libor is now 2.25, they adjust to 3.75% tp 4.75% (usually from a teaser that was round 2.5), and add capital. A loan that was 2,000 a month goes to about 3200.

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