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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: russwinter who wrote (24889)	1/18/2005 5:54:34 PM
From: mishedlo	Read Replies (1) \| Respond to of 110194

Still with the Libor at 3.10%+2.25= 5.35% at the Dec. 31th reset, and now 3.25% (today)+ 2.25%= 5.50%, I can't see how lenders can make 4.75% 3 year ARMs loans without being well paid up front on points, fees, and still make it a teaser? Russ I believe 3 yr arms are ties to 3 yr libor. What is 3 yr libor? Then the question is big: what does libor adjust to at end of 3 yrs? Does it stay at 3 yr libor, drop to 1 yr libor, 6 month libor, or 1 month libor? That is crucial and I bet the average person taking out a 3 yr-arm has no idea what they signed. Mish