“In the second year of the U.S. housing recovery, the loans that helped trigger the housing bust are making a comeback. Applications in late June rose to the highest level since 2008 after the Federal Reserve sent fixed rates surging by signaling it may curtail bond buying credited with pushing borrowing costs to the cheapest on record. The average 30-year fixed-rate mortgage jumped 1.2 percentage points in mid-July from May to the highest level in two years, adding about $200 a month to payments on a $300,000 mortgage. ARMs, loans with interest rates that adjust after initial fixed periods, usually of five, seven or 10 years, contributed to soaring defaults in 2008.”

http://www.bloomberg.com/news/2013-07-24/americans-gambling-on-rates-with-most-arms-since-2008.html

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