AccessMyLibrary provides FREE access to over 30 million articles from top publications available through your library.
Create a link to this page
Copy and paste this link tag into your Web page or blog:
ARMs and HELOCS Could Run Off.(Adjustable rate mortgages)(Home-equity lines of credit)
New York -- The recent dip in long-term interest rates has loan originators revving up their engines, but the new portfolio churning may look different than the refinancing of recent years.
This time, recently originated adjustable-rate mortgage loans and home-equity products may be the ones running off lenders' balance sheets.
The borrowers who are the most likely candidates for refinancing in today's market are people with adjustable-rate loans or high-cost second-lien debt, said Frank Nothaft, chief economist at Freddie Mac.
Home-equity lines of credit, he noted, are typically adjustable and are priced off of the prime rate, typically around three percentage points above prime for high-credit-quality borrowers.
That means many home-equity loans and HELOCs today carry interest rates that are higher than the prevailing rate on 30-year, fixed-rate loans, which hit a 14-month low of 5.56 in the week of June 9.
That could lead some home-equity borrowers to consolidate debt by refinancing their first mortgage in a cash out transaction and rolling their home-equity debt into the first-lien loan. Freddie Mac's quarterly survey of refinancing has already shown an increase in cash out transactions as borrowers consolidate debt or tap into their equity for other purposes, such as home improvements.
If you are a homeowner and you have a home-equity loan or a HELOC, the rate has gone up a lot. And it's probably going to go up another half a point before the summer is out, Mr. Nothaft said.
- Freddie Mac. (Business Briefs).(interest rates and home sales)(Brief...
- Magazine article from: Arkansas Business April 1, 2002 700+ words
Low interest rates and mild weather boosted new-home sales 5.3 percent in February...fixed-rate mortgage was 6.89 percent in February, according to Freddie Mac, the federal mortgage corporation, but mortgage rates have risen...
- Hey (Freddie) Mac, Can You Spare a Mortgage?: Never mind the rising interest...
- Magazine article from: US Banker Sisk, Michael July 1, 2005 700+ words
...vp of national lending at Freddie Mac. "The key principal in the...their relationship with Freddie Mac, and creating an organization...mortgage levels set to decrease as interest rates rise, Freddie Mac and the home lending industry...
- Rise in Interest Rates Sparks Retreat in Freddie Mac Share Price.(Knight...
- Newspaper article from: Knight Ridder/Tribune Business News Bhambhani, Dipka December 28, 1999 700+ words
...27--Rising interest rates and the dot-com...main reasons the Freddie Mac stock is undervalued...ever since interest rates began rising in...said increasing interest rates do not affect Freddie Mac, and investors...
- Transnational Financial Network, Inc. Announces the Right to Sell and Service...
- Press release article from: PR Newswire November 1, 1999 700+ words
...sell and service loans to Freddie Mac is a significant step in...For the past 25 years, Freddie Mac has helped keep mortgage interest rates low, brought automation...this new agreement with Freddie Mac. We see this agreement...
- B&C prepay penalties give Freddie Mac pause.
- Magazine article from: Origination News Collins, Brian December 1, 2000 700+ words
...One of the reasons Freddie Mac continues to take...influenced by movements in interest rates. But in the subprime...contracts. This prompted Freddie Mac to stop accepting...market and it lowers interest rates. Freddie Mac estimates that borrowers...
- Pennsylvania Experts Explain Importance of Freddie Mac.
- Newspaper article from: Knight Ridder/Tribune Business News June 15, 2003 700+ words
...arise from the turmoil at Freddie Mac." Q: Should I be worried...demanding slightly higher interest rates on Freddie Mac debt, and because higher...modest jump last week in interest rates on Freddie Mac debt, "it doesn't look...
- U.S. Considers Remaking Mortgage Giants; 'Bad Bank' Would Wipe the Slate Clean...
- Newspaper article from: The Washington Post Zachary A Goldfarb; David Cho August 6, 2009 700+ words
...companies. Fannie Mae and Freddie Mac existed for years as odd...debt from Fannie Mae and Freddie Mac. That further helped to lower interest rates on home loans. The government...lawmakers that Fannie Mae and Freddie Mac had grown so large that...
- 'Buy' recommendation for Freddie Mac stock. (by Friedman, Billings, Ramsey and...
- Magazine article from: American Banker August 12, 1996 700+ words
...price gains linked to indications of stabilizing interest rates. Freddie Mac's first-half earnings were up 19%. Ms...also noted that several factors bode well for Freddie Mac's earnings, including improving credit quality...
