December 20th, 2009 10:34 PM by Eric Fang
On Friday Dec 18th, the 1 yr LIBOR index was 0.968. So the ARM rate should be lower. But the reality is that the ARM rate was higher compared to the most of time in November.
Most people will ask why? Yes, I want to know the answer as well.1)The lenders are more interested in the fixed programs now when 15 yr fixed and 30 yr fixed at history low end of Nov. They need time to close those transactions. Abd they don't have any incentiveto lower the ARM rate yet. Until they close most of the pipeline.
2)The lenders are not yet ready to lower their profit marginsto attract more business(It does make sense, right?)