Ginnie Mae is securitizing nearly $1 billion in hybrid adjustable-rate mortgages a month, according to Deutsche Bank, and most of the production is coming from the Department of Veterans Affairs loan guarantee program.Since the VA started its hybrid program in October 2003, lenders had originated 59,700 hybrid ARMs totaling $7.2 billion as of Sept. 30. This constituted 18% of VA loan production in fiscal year 2004, which totaled $44.1 billion. Most of the hybrids (55,000 loans) were refinancings. The average interest rate on VA hybrid loans is 4.49%, compared with 5.76% for a fixed-rate mortgage. The Federal Housing Administration started its hybrid program in April. As of Sept. 30, FHA lenders have originated 4,550 hybrids totaling $626.1 million.

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