| Fed's rate cuts ignite a rush to refinance
A positive note in the chorus of bad economic news sounds loudly, like a call to arms. Or, as happened after the Federal Reserve dropped short-term interest rates three-quarters of a percentage point Tuesday, a race to refinance. The refinancing frenzy began right after the Fed's announcement, local brokers and bankers reported. The 10-year Treasury bond rates on which fixed mortgages are based also fell, and interest rates for 30-year loans plunged as far as 5.125 percent, the lowest level since spring 2004. On Jan. 1, the 30-year fixed rate averaged 6.07 percent; it has ranged between 6 percent and 6.5 percent for two years. Though the number of refinancing applications will not be available until Wednesday from the Mortgage Bankers Association, newspaper and television accounts from Bangor, Maine, to Los Angeles described a boom in activity.
Reverse mortgage workshop informs public about the pros and cons
Local residents gathered at the Kernville Chamber of Commerce Jan. 16 to learn more about reverse mortgages. The Prince Financial Corporation representative, Barbara Prince, Bankers First representative Rylan Rozell and Patty Nash of McKenzie and Nielsen provided those in attendance with large packets of information on the ins and outs of reverse mortgages including the negative aspects of entering into a reverse mortgage. The purpose of the presentation was to educate as well as provide financial opportunities for seniors. According to the Reverse Mortgage Page website over 50,000 Americans applied for reverse mortgages in 2006. A reverse mortgage is a way to borrow against the equity in your home rather than a forward mortgage where you are attempting to purchase a home and build home equity by making mortgage payments.
Banker's Northern Rock salvage plan
A former boss of Abbey said that he was working on a possible salvage plan for stricken mortgage bank Northern Rock. Luqman Arnold - regarded as one of the City's most experienced bankers - is preparing a proposal that does not involve the sale or break-up of the Newcastle-based business. Mr Arnold will use a heavyweight team of banking experts to work alongside existing management in an attempt to save the ailing bank. The team - drawn from Mr Arnold's financial services investment business, Olivant - will take a minority stake in Northern Rock. He is best known for joining Abbey after the UK's fifth-biggest bank dived into the red five years ago. He stabilised its performance before the business was sold to Spanish bank Santander.
Marylanders getting more mortgage help than many
Marylanders in trouble on their mortgages are getting more help from their lenders than homeowners in the country as a whole, a new report suggests.
Even so, the number of homes that companies began foreclosure proceedings on last summer outpaced the number of homeowners they struck deals with, according to the survey of mortgage servicers released by the Mortgage Bankers Association yesterday.
Servicers started foreclosure proceedings on nearly 6,300 Maryland homes from July through September, the group estimated. During that time, the companies agreed to repayment plans or loan modifications for almost 5,800 borrowers. That's about 9 percent more attempts to foreclose than new "workout" plans.
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