Given the recent yield curve dynamics, there has been talk about the potential for ARM-to-fixed refinancings. Based on their analysis, Lehman Brothers does not expect a reversal of the recent structural shift towards hybrids.

Lehman focused on the drivers of ARM originations and the bottom line, analysts said, is that the yield curve shape has little bearing on the share in ARM originations. This is supported by the fact that ARM share increased even with the curve flattening dramatically in the past 18 months.

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