Starting Monday, we will introduce a new article written by HSH’s Vice President Keith Gumbinger. The five-part article outlines the need for and value of Adjustable Rate Mortgages (ARMs).

The article is written in defense of the mortgage product which many, including Washington,  are nearly ready to write off entirely. For example, it’s expected that the proposed Consumer Finance Protection Agency would all but eliminate adjustable-rate products. “Arguments that ARMs are ‘evil’ or ‘toxic’ simply aren’t supported by facts,” writes Gumbinger.

“ARMs have been vilified over the past few years, implicated in the collapse of the housing market. However, there are people who want — even need — ARMs, and they shouldn’t be eliminated from the mortgage menu under the guise of ‘consumer protection.’”.

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HUD Secretary Shaun Donovan announced this afternoon that Fannie Mae and Freddie Mac will now begin refinancing loans with a loan-to-value (LTV) of up to 125% under the Home Affordable Refinance Program. Federal officials have concluded that by expanding the eligibility of the effort, more underwater homeowners will be able to refinance, spurring the recovery of the housing market:

“This decision is part of our ongoing efforts to maximize the effectiveness of the Making Home Affordable program and adapt to an ever-changing housing market,” said Treasury Secretary Tim Geithner. “By expanding refinance eligibility, we can bring relief to more struggling homeowners more quickly. It’s a crucial step in our broader efforts to get America’s housing market and economy on the path to recovery.”

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