Adjustable-rate mortgages accounted for a remarkable 39.4 percent of loans backing non-agency MBSs issued during the second quarter of 2003, according to a new Inside MBS & ABS market analysis. Given the opportunity to lock in the lowest fixed mortgage rates in more than 40 years, over a third of the borrowers whose loans went into non-agency MBS chose ARMs instead. At 39.4 percent,