Falling LIBOR May Decrease Defaults

[Veronica Corningstone]

The yield on the one-month and six-month London Interbank Offered Rate has tumbled recently to the lowest level in over three years, according to a new report from Standard & Poor's Ratings Services. As a result, many hybrid adjustable-rate mortgages could be favorably impacted. For instance, payments on ARMs will be lower, resets will cause less payment shock and refinance opportunity will improve for ARM borrowers.