This article (via Mark Thoma) in The Atlantic reports on a study by the Boston Fed on home foreclosures. The adjustable rate mortgage, that has been singled out as the problem by many, had a small impact on the foreclosure rate. Only 6% of foreclosures took place after the rate adjusted upward. Most foreclosures were on fixed rate mortgages or on ARM's that occurred prior to the upward adjustment.
Fixed rate mortgages have higher interest rates because the lender has to factor in the risk of higher interest rates in the future that would reduce the value of the mortgages that they issued. This article makes the point that lenders may not have priced that risk high enough and that could produce the next crisis. Its also a good argument for homeowners to choose fixed rate mortgages since they may be underpriced.
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