ARMs were developed because lenders were tired of offering a limited selection of loan alternatives to borrowers.

Question

Quizplus · Accepted Answer

ARMs (Adjustable Rate Mortgages) were developed primarily to provide borrowers and lenders with more flexibility in response to fluctuating interest rates, allowing the interest rate on the loan to adjust over time based on prevailing market conditions, not simply because lenders were tired of offering a limited selection of loan alternatives.

ARMs Were Developed Because Lenders Were Tired of Offering a Limited