Whatever the terms are, you can be sure BAC isn’t going to skimp on their underwriting or price the loans at a break-even. Given the poor quality of the ARMs they’d replace these loans will probably be an improvement, but only for those borrowers who have the equity and the income to qualify. Frankly, I’d be surprised if more than about 10% of the ARM borrowers are in that position. But 10% is still a pretty big number and BAC probably wants their share of that business.
