Countrywide Posts 47 Pct Drop in Earnings: "Countrywide told analysts on a call that profits were eroded by a shift in demand among home buyers to adjustable rate loans from fixed rate loans. 'Generally, fixed-rate (loan) products carry higher margins. Our product mix has shifted to more ARMs (adjustable rate mortgages),' Mozilo told analysts. Adjustable rate mortgages—attractive for first-time home buyers because they offer lower monthly payments initially—accounted for 61 percent of all loans Countrywide processed in the third quarter."—Reuters via Yahoo! News

When the oil business went south in the 1980's, Texas banks were swamped by loan defaults. Today, there aren't any Texas banks. A shift to ARM's at a time of rising interest rates seems like a recipe for mortgage defaults. Good luck, CFC.