Performance on U.S. option ARM RMBS is probably going to continue its drop as $134  billion  of  these  loans  will  recast  over  the next two years, Fitch Ratings said in a report released today.

Of  the  $189 billion securitized option ARM loans outstanding, 88% have still  to  experience a recast event, even though it should be noted that Fitch rated  only  roughly 5% of option ARM transactions.

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