With the current historical steepness of the yield curve caused by the Fed's continued easing, short-duration mortgages such as ARMs are becoming more and more attractive causing additional prepayment concerns among investors.

In a recent Countrywide Securities report analysts estimated total ARM originations for the first six months of this year to be approximately between $120 billion and $175 billion based on the Mortgage Bankers Association's percentage of ARM applications by dollar amounts.

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