WASHINGTON - As interest rates on fixed-rate mortgages fell in April, so did the market share of adjustable-rate mortgages, reaching 41%, according to the Federal Housing Finance Board.

This was the third month in a row that the market share of ARMs has fallen. It was 59% in January, 53% in February, and 44% in March.

The interest rate on ARMs fell 0.04%, to 7.14% in April. The interest rate on fixed-rate loans fell more sharply, by 0.22% to 8.57% in April.

Still, ARMs continued to be a strong product for thrifts and banks. At thrifts, 65% of loans originated in April were ARMs, down from 81% in January. Fifty percent of home loans originated at banks in April were ARMs, down from 69% in January.

At mortgage banks, only a quarter of loans made in April were ARMs, down from 44% in January.

The Finance Board said that ARM loans on average were about $32,000 larger than fixed-rate loans. In April, the average ARM loan was for $126,800.

Nearly three-quarters of loans above the conforming loan limit of $203,150 were ARMs in April. By contrast, only 38% of loans at or below this limit carried adjustable rates.

By law, Fannie Mae and Freddie Mac are confined to buying loans below $203,150.

ARM loans also carried higher down payments than fixed-rate loans in April, the finance board reported.

The average ARM loan had a loan-to-price ratio of 80.1%, while fixed rates loans had an average ratio of 80.8%.

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WASHINGTON - The Department of Housing and Urban Development has decided to reevaluate the new program review provisions of its proposed rule on Fannie Mae and Freddie Mac.

Speaking at a housing conference sponsored by Fannie Mae, HUD Secretary Henry Cisneros said last week that the language governing the review provisions would be changed so that "only truly new GSE programs are subject to review by HUD."

Mr. Cisneros said the change would enable most Fannie Mae and Freddie Mac programs to go ahead in response to market forces, rather than be bogged down in a complicated regulatory process.

Both Fannie Mae and Freddie Mac had lobbied hard against the review. They argued that the review provisions were unnecessarily broad and would inhibit their capacity to innovate.

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