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What is an Adjustable Rate Mortgage Loan?
By Samuel Phineas Upham Consumers during the 1980s were struggling to get loans, which meant that banks were losing money too. Part of the plan to give the slowing economy a bit of a boost involved the Depository Institutions Act of 1982. This act de-regulated the average savings and loan institution, and it gave them more freedom on the kind of loans they could offer. Title VIII of the act gave banks the power to offer what is known as an “Adjustable-Rate Mortgage.” Some economists say that this act was instrumental in the financial crisis of the 1980s, so it’s important to understand how ARMs work and what the average…