Originations of adjustable-rate mortgages declined by 4.8% from the third to the fourth quarter and by 13.7% for the full year 2021. Bank of America was the top ARM producer. The loans largely remain in portfolio. (Includes data chart.)
Borrowers with loans in various types of MBS and ABS could be stretched as interest rates increase, according to industry analysts. Prepayment rates are also likely to slow.
Loan-level details from CoreLogic provide a comparison of interest rates charged on jumbos and conventional mortgages. One finding: Spreads returned to pre-pandemic levels in the second half of 2021.