The initial rate discount for prime 3/1 and 5/1 adjustable-rate mortgages, which had been about 1.8 percentage points, has "virtually disappeared," according to an annual Freddie Mac survey. "The survey, based on data collected between Dec. 17 and Dec. 21, found that starting rates for ARMs were close to or above rates a year earlier, even though the Federal Reserve had lowered its federal funds target from 5.25% to 4.25% over the time since Freddie Mac's previous survey," the government-sponsored enterprise said. Freddie Mac can be found on the Web at http://www.freddiemac.com.
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