NEW YORK - At the Bear Stearns' Mortgage and Structured Products Conference 2005 held here last week, analysts expressed concern about whether the influx of new affordability mortgage products has created artificial borrower demand, making lower credit borrowers more vulnerable in a rising rate scenario.

Senior Managing Director Dale Westhoff said that there are three recent major changes in the mortgage market: record home price growth, expanded access to credit and the growth of new affordability mortgage products such as hybrid ARMs and interest-only mortgages. Some of the consequences of these changes, he said, are the fastest discount speeds on record and a shrinking and fully amortizing fixed-rate universe.

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