The News Review:
- Mortgage rates fall but many borrowers will have trouble qualifying
- Mortgage rate drop sparks surge in consumer interest
- Meltdown far from over new mortgage crisis looms
- Cheyne’s Queen’s Walk Fund Reports Loss Amends Debt (Update1)
- Malls hotels next victims in new mortgage crisis
- Time for the Fed to start manipulating mortgage rates?
Mortgage rates fall but many borrowers will have trouble qualifying
Los Angeles Timesnbsp;CAnbsp;
Homeowners who want to refinance existing mortgages may be more likely to take advantage of the lower rates but many people who bought during the real estate bubble won’t be able to qualify for a new loan because they have little equity or are “upside down” — owing more on their homes than they are worth. “I anticipate it will increase refinance activity but there will be nothing dramatic” said Terrin Griffiths an economist for the California Credit Union League which represents credit unions in California and Nevada. Jeff Lazerson a Laguna Niguel mortgage broker said all the customer calls he received Tuesday were from people seeking to refinance not buy homes. Many are trying to get out of adjustable-rate mortgages scheduled to reset to higher rates next year he said. But most who called were rebuffed because they were upside down on their current mortgages or had credit scores too low to qualify. “Out of all the people calling about 30% at most can get help” Lazerson said. Adjustable-rate mortgages were especially popular in 2005 and 2006 because home buyers expected prices to continue to rise enabling them to refinance before the loans reset.
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Mortgage rate drop sparks surge in consumer interest
San Jose Mercury Newsnbsp; USAnbsp;
That volume continued Wednesday he said. Wells Fargo said it was experiencing “a significant increase” in contact from customers interested in a refinance or home purchase. “Low rates are only part of getting a mortgage though” said spokesman Jason Menke. Banks are refinancing loans for people with good credit scores equity in their homes and stable income. Home buyers need a hefty down payment good credit and solid income. “They are looking for income” Warshawsky said. “They are not letting you do stated-income loans.
Meltdown far from over new mortgage crisis looms
The Associated Pressnbsp;
Some will survive but those property owners whose loans required little money up front will have less incentive to weather the storm. Refinancing formerly was an option but many properties are worth less than when they were purchased. And since investors no longer want to buy commercial mortgages banks are reluctant to write new loans to refinance those facing foreclosure. California New York Texas and Florida #x2014; states with a high concentration of mortgages in the securities market according to Fitch #x2014; are particularly vulnerable. Texas and Florida are already seeing increased delinquencies and defaults as are Michigan Tennessee and Georgia. The worst-case scenario goes something like this: With banks unwilling to refinance a shopping center goes into foreclosure. Nobody can buy the mall because banks won’t write mortgages as long as investors won’t purchase them.
Cheyne’s Queen’s Walk Fund Reports Loss Amends Debt (Update1)
Bloombergnbsp;
market?Shamez Alibhai a portfolio manager at Cheyne Capital in Londonsaid in an interview. ?We?ve taken a more bearish view. ? A quarter of British borrowers of so-called non-conformingmortgages are falling behind on their loan payments accordingto Standard amp; Poor?s as the fallout from the credit crisismakes it harder to refinance. Queen?s Walk expects cashflowsfrom U. mortgage holdings to decline by 50 percent in thethree months ending Dec. 31 and a similar drop through March.
Malls hotels next victims in new mortgage crisis
Westfall Weekly Newsnbsp;Canadanbsp;
When those $20 billion in mortgages come due next year #151; 2010 and 2011 totals are projected to be even higher #151; many property owners won#145;t have the money. Refinancing formerly was an option but many properties are worth less than when they were purchased. And since investors no longer want to buy commercial mortgages banks are reluctant to write new loans to refinance those facing foreclosure. The worst-case scenario goes something like this: With banks unwilling to refinance a shopping center goes into foreclosure. Nobody can buy the mall because banks won#145;t write mortgages as long as investors won#145;t purchase them. That drives down investments already on the books. Insurance companies are seeing their stock prices fall on fears they are too invested in commercial mortgages.
Time for the Fed to start manipulating mortgage rates?
Los Angeles Timesnbsp;CAnbsp;
Yardeni who heads Yardeni Research in Great Neck N. says that with the housing market still falling fast and the rest of the economy going along for the ride a global depression is a real risk. The Fed has slashed its benchmark short-term interest rate to 1% over the last year he notes with little or no effect on most long-term interest rates.