S&P Outlines Rating Criteria for New Loan Variation: Hybrid Option ARMs
July 21, 2006
Standard & Poor’s this week released criteria for rating a relatively new form of adjustable-rate mortgage: option ARMs that feature an extended initial fixed-rate period. The so-called hybrid option ARM has more payment certainty than the most common form of option ARM, which features monthly rate adjustments that typically begin within three months of origination. Under the new program, rates are fixed for up to seven years. …