Bloomberg columnist: Adjustable-rate mortgages not the enemy

Adjustable-rate mortgages (ARMs), whose rates fluctuate with the market, actually may be a good thing, writes a Bloomberg columnist. Despite their bad reputation earned in their connection to the housing crash, ARMs make it easier for homeowners to make payments on their mortgage even if they’re underwater because rates dip during housing hard times.

Therefore, ARMs could be a valuable tool going forward if administered correctly and responsibly, she noted.

“ARMs are a sort of natural macroeconomic stabilizer,” she wrote, “one that may have prevented the housing bust from being much worse than it was.”

Source: Bloomberg