ARM Borrowers Switching to Fixed-Rate Refis

Nine out of 10 adjustable-rate mortgage borrowers chose fixed-rate loans when they refinanced in the fourth quarter, according to Freddie Mac. Of those borrowers who originally had a one-year ARM, 92% chose a fixed-rate mortgage in the second quarter, as did 89% of borrowers who originally had a hybrid ARM, Freddie Mac said in its Refinance Product Transition Report. "The turmoil in the financial markets that started in August and continued through the fourth quarter led most mortgage lending institutions to tighten their underwriting standards, and thus some ARM products were either no longer available or came with more restrictions," said Amy Crews Cutts, Freddie's deputy chief economist. Freddie Mac can be found online at http://www.freddiemac.com.