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FRIDAY, NOVEMBER 27, 2009
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Libor-Based ARMs Seen Costing More.(Mortgages)(adjustable-rate mortgages)(Brief article)

Article from: American Banker Article date: January 30, 2009 Author: Berry, Kate

Byline: Kate Berry

Adjustable-rate mortgages based on Libor may cost borrowers far more than comparable mortgages based on U.S. Treasury rates, according to research by the Federal Reserve Bank of Cleveland.

Roughly 90% of subprime mortgages are linked to the London interbank offered rate, or Libor, said the Cleveland Fed's research director, Mark Schweitzer, and its senior policy analyst, Guhan Venkatu.

If current interest rate trends persist, these ARMs will cost borrowers in Ohio alone an additional $34 million, ...

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