Traditional fixed rate mortgage


In 2004, the Chairman of the Federal Reserve, Alan Greenspan, suggested that lenders "provide greater mortgage product alternatives to the traditional fixed rate mortgage." Banks responded by lending billions of dollars to borrowers, using adjustable rate mortgages (ARMs), in which rates fluctuate over the life of the loan and are linked to an economic index, such as United States Treasury securities. These loans were provided to many borrowers who may not have qualified for traditional fixed rate loans, whose monthly initial payments were higher.

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Business Management: Traditional fixed rate mortgage
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