| Homeowners scurrying to refinance
O'Mahoney is among a growing number of consumers who are taking advantage of fixed-rate loan offers that have sunk to their lowest levels since 2004. The average rate on a 30-year fixed-rate mortgage fell to 5.48 percent yesterday, down from 5.69 percent the week before, according to Freddie Mac's weekly survey. Declining rates are further evidence of weakness in the housing market and follow this week's emergency rate cut by the Federal Reserve, said Frank Nothaft, Freddie Mac's chief economist, in a statement yesterday. The 30-year fixed-rate loan averaged 6.25 percent a year ago, while current levels haven't been this low since late March 2004, when 30-year mortgages averaged 5.40 percent. Lower rates are quickly leading to new business.
High-End Housing Blues
With industry analysts not predicting relief within the next year, that could be the issue.Sagely agrees. "I think we're going to see some surplus in these higher-end homes the further we go along."Mortgage Slow DownRealtors aren't getting any help from mortgage companies when it comes to getting customers into certain homes. Bill Oberste, principle broker with Kralicek Realty, said one of his agents has had several customers who were denied home loans recently and would have normally received one in years past.Foreclosures have taken a toll on mortgage companies. Countrywide Financial, the nation's leading mortgage lender, reported a $1.2 billion third-quarter loss Oct. 26. While much of the losses are due to foreclosures on subprime and unconventional loans, that strain has also affected high-end loans.Just as subprime mortgages can't be purchased and guaranteed by Fannie Mae or Freddie Mac, the same goes for jumbo mortgages, or any home loan totaling more than $417,000.
Change in bankruptcy laws pondered amid home mortgage meltdown
WASHINGTON | After being hooked with ill-advised subprime loans on their homes, many thousands of Americans could end up gaffed in bankruptcy courts next year. Despite a new law to make filings more painful, bankruptcies surged by nearly 40 percent in 2007, leading Samuel Gerdano, American Bankruptcy Institute director, to predict "even higher filings this year, as the heavy consumer debt load is made worse by the home mortgage crisis." Some in Congress want to wade in to try to help prevent more — perhaps as many as 2.2 million — homes from being lost to foreclosure. Nearly 20,000 Missourians risk losing homes, said Sen. Claire McCaskill, a Missouri Democrat. Sen. Chris Dodd would roll back provisions in the law enacted two years ago to make it harder for people to file for bankruptcy and walk away from their debts.
Brown Defends Northern Rock Talks
British Prime Minister Gordon Brown rejected accusations Sunday that his government was using taxpayer funds to make the sale of mortgage lender Northern Rock PLC more palatable for a private buyer. Brown also dismissed suggestions that Richard Branson, whose Virgin Group is Northern Rock's preferred bidder, had gained an unfair advantage because of his presence in a delegation of business leaders that is traveling with Brown in China and India. "I can reassure people entirely that any negotiations about Northern Rock will be taking place in London," Brown told reporters on Sunday. Northern Rock ran into trouble in September when short-term money markets dried up following the collapse of the U.S. subprime mortgage market. Heavily reliant on funding from those markets, Northern Rock approached the Bank of England for an emergency loan.
Resolve to avoid credit pitfalls
Here's a different spin on financial New Year's resolutions. It's what you should not do in the new year, provided by the National Foundation for Credit Counseling and the Consumer Credit Counseling Service of Northeastern Ohio. These are resolutions you SHOULD break: • Apply for every credit card you receive in the mail. (This makes your credit score lower.) • Charge everything, even those items that you could easily pay for with cash. (This runs up a large debt load.) • Don't open the monthly statements from your creditors in a timely manner. Instead, wait until it's convenient for you. (This equals late charges.) • Open store charge accounts simply because they'll give you 10 percent off today's purchases.
Feds ask student-loan agency to repay $15 million
HARRISBURG, Pa. (AP) - The federal government is asking Pennsylvania's student-loan agency to repay as much as $15 million that officials say it received in excess loan subsidies over a two-year period.
The U.S. Education Department outlined its request Friday in a letter to the Pennsylvania Higher Education Assistance Agency.
The department's inspector general released an audit in November saying PHEAA was overpaid $35 million in federal subsidies over a three-year period. But department officials say they didn't accept all of the audit's findings.
PHEAA spokesman Keith New says the agency has been negotiating with the department over how much money, if any, it should repay the government. The negotiations are part of a separate federal program review of the subsidy payments.
Brown gives gloomy forecast for world economy
Gordon Brown said today that there was "bad news still to come" in the unfolding story of the global credit crunch and market turmoil. The Prime Minister called for urgent action to increase the transparency of financial dealings as well as a re-think of the pricing of risk which had been "misunderstood" and under-valued. He told delegates at the World Economic Forum in Davos today: "This is indeed a testing time for the global economy, for all of us who believe that globalization is about free trade." But he said: "There is a real danger that we fall for the familiar responses that we have seen in past decades, the first is … heavy handed regulation, the second thing is to resort to protectionism and I see it in America and parts of Europe and the third is to be paralysed into action." .
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