The Mortgage Bankers Association is predicting that $600 billion to $700 billion worth of adjustable-rate mortgages will refinance in 2007 before the loan resets and the borrower gets hit with a higher rate.Those borrowers could end up with 7.5% interest if the loan resets, but now they can refinance into a 6.13% fixed-rate mortgage, which would be "pretty enticing," MBA economist Mike Fratantoni said. The MBA estimates that $1.1 trillion to $1.5 trillion in ARMs could reset in 2007, and $600 to $700 billion of those loans "will actually refi before they face any higher payment," the MBA economist told the Women in Housing and Finance symposium. "So you have $300 to $400 billion worth of mortgages where the borrowers will face a higher payment for the first time," Mr. Fratantoni said. "We don't think that will be a macroeconomic event."

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