With affordability mortgages on the rise, there has been an increased focus on the MTA option ARM product, particularly because of the perceived danger of these borrowers not being able to cope with the potential intense payment shock they may experience upon recast as well as the increasingly negative amortization lenders have reported. However, analysts said that the risk in these products is exaggerated in light of the quality of MTA ARM borrowers.

At a Bear Stearns conference call last week, analysts acknowledged the severe payment shock that MTA ARM borrowers could experience particularly because these loans are "highly teased, " said Bear Senior Managing Director Dale Westhoff.

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