Mortgage Blog

This week Bernanke and the Fed lowered the Fed Funds Rate and Discount Rate by .5%.  In a rather unusual move, foreign central banks lowered rates simultaneously.  All of this followed Washington's passage of the $ 700 billion rescue for the Street.  Interest rates have benefitted earlier in the week from the weakness in the securities markets, but now have reversed course and moved upward after the drop in short term rates. 

Of special importance to ARM holders is the fact that many ARM's originated in the recent past are pegged to the LIBOR index which has suffered from the weakness in the financial industry.  Even more staggering is the fact that there are still millions of loans pegged to this index that are yet to go into adjustment.  In other words, if you or someone you know is currently in an ARM you would be well served to examine your current situation and seek out alternatives especially will the dollar dilution that seems to hit the Street almost daily pointing to inflation.