Non-agency securities collateralized by jumbo hybrid adjustable-rate mortgages (ARMs) are continuing to develop in the private-label sector. Securitization volumes from certain issuers rival or exceed their fixed-rate production. It is only a matter of time before other significant hybrid ARM lenders start securitizing their hybrid ARM production, thus increasing liquidity in the sector. Pricing in the sector should become consistent as production gradually shifts from constant-maturity Treasury-based hybrid ARMs to hybrid ARM products indexed to LIBOR. This report addresses the typical questions about prepayment characteristics of these bonds, their relative value, and the expected credit performance of the underlying loans, with particular emphasis on 5/1 hybrids, which constitute the most heavily originated and securitized hybrid ARM loans.