Industry observers have been bracing for October, when an estimated $50 billion worth of adjustable rate mortgages are going to reset to higher rates.

An already beat up market is no doubt jittery about the prospect of a new influx of defaults and delinquencies unraveling from the resets. Some analysts, however, are holding out hope that the Federal Reserve's decision to cut interest rates by 50 basis points last month could soften the blow.

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