ARM Update

August 20, 2018

Spreads were unchanged in ARMs last week despite the slight widening in their fixed-rate counterparties.  The August ARM origination cycle started and despite the cyclical increase in supply, volumes were comparably lower versus last month.  The increase was primarily driven by higher G2 5/1 issuance, which was at the expense of 3/1s.  The issuance of 3/1s has been minimal due to the flat curve and the net tangible benefit test for VA loans.


Activity was primarily focused on the following last week:


The following chart reflects the week over week change in LIBOR option-adjusted spreads for ARMs. GNMA, FNMA, and FHLMC OAS’s widened.

Ricky Brillard, CPA


Vining Sparks, IBG

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