With adjustable-rate mortgage rates benefiting from a steep yield curve, consumers are showing increased interest in applying for ARMs as opposed to fixed-rate mortgages, and that rising interest is reflected in the issuance projections for ARM securities in 2002.

ARMs issuance is expected to exceed $100 billion this year, closely following 2001's $122 billion supply -- marking this as the second year in a row that ARM mortgage-backed securities issuance tipped over $100 billion, according to a Bear Stearns report.

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