According to FoxNews.com, “The action revives the central bank’s rate-cutting campaign which had been halted in June out of concerns that those low rates would worsen inflation. Since then, however, economic and financial conditions have dangerously deteriorated, forcing the Fed to reverse course.”
While many conclusions can be drawn from this action, it is clear that the Fed recognizes the significance of the economic crisis we are facing and the decision to cut rates underscores their belief that we need immediate intervention.
It remains to be seen how this will effect mortgage interest rates. The market has improved on the heels of the decision and we are hoping for a drop in rates. Please contnue to check http://abbafirst.com/ for all the latest news and interest rate information.
ABBA First Mortgage, Inc. is pleased to announce that our new Rate Tracker is available.
What is the Rate Tracker?
We know that you are busy and constantly checking the web for updated rates is time consuming and tedious. Let us do the work for you! This new tool will allow you to input the interest rate that you want and we will contact you when that rate becomes available.
How does it work?
Your information is stored in our database and cross-checked everyday with the most up-to-date interest rates. When the interest rate and terms you are looking for become available, ABBA First Mortgage, Inc. will contact you so that you can begin the application process.
Does it sound simple? It is. We are thrilled to offer this new service to you and believe that it adds even more value to our already unparalleled service, guaranteed low rates and guaranteed low closing costs. To try the new tool for yourself click here.
WASHINGTON — The Federal Reserve and other countries’ central banks announced new steps Monday that makes billions of dollars available to squeezed banks here and abroad to battle a worsening credit crisis that threatens to unhinge the U.S. economy.
The Fed said the action is intended to “expand significantly” the availability of cash available to financial institutions in an effort to provide relief to the worst credit crisis since the Great Depression. In taking the action, the Fed cited “continued strains” in the demand for short-term funding.
Central banks will continue to work closely and are prepared to take “appropriate steps as needed” to stem the fallout, the Fed said.
Under one new step of relief, the Fed will boost the amount of 84-day cash loans available to U.S. banks. The Fed is increasing the amount to $75 billion, up from the current $25 billion starting on Oct. 6. Banks bid on a slice of the loans at an auction.
All told, the move will triple the supply of 84-day loans to $225 billion from $75 billion, the Fed said.
The Fed also said it will supply $330 billion to other central banks, expanding ongoing currency “swap” arrangements with them where dollars are traded for their currencies.
The move comes as the U.S. financial meltdown’s tendrils have ensnared banks in Britain, the Benelux and Germany.
In a widely anticipated move, The Fed has elected to keep the federal funds rate, that is, the rate that banks charge each other at 2%. Although intended to stave off inflation and temper downside risks to growth, it is apparent that the Fed is hoping this will calm the turbulent markets as well.
We expect the volatility in interest rates to continue as it is very likely that the Fed will leave they key rate at 2% for the rest of the year.
Please feel free to contact us if you have questions or concern about how this may effect you.
ABBA First Mortgage, Inc. will be closed on Monday, September 1st in observance of Memorial Day. We will resume normal business hours on Tuesday, September 2nd. We look forward to serving all of your mortgage needs…
SAN FRANCISCO (MarketWatch) — The Federal Deposit Insurance Corp. said Wednesday it will offer thousands of homeowners with bad IndyMac-originated mortgages better terms to rehabilitate the loans. By the end of the week, FDIC said it will send out “several thousand modification offers” to homeowners with IndyMac mortgages that are seriously delinquent or in default. The modifications will cap interest rates at 6.5% and payment options will be designed to keep payments at a 38% housing debt-to-income rate. In July, FDIC was named conservator of failed IndyMac Bank, which was renamed IndyMac Federal Bank.
In May, RealtyTrac, a leading online market for foreclosure properties, reported that foreclosure rates were up 4 percent in April from March levels, but up a whopping 65 percent from April 2007.
There’s that old saying that one person’s misfortune is another person’s happiness. But in these troubled times for the mortgage industry, those who consider investing in foreclosure properties should not only understand foreclosure and the importance of cash in the process, but the emotional element unique to this kind of investment.After all, each foreclosure represents someone who has lost a home.
With the rise in foreclosures, you’ll definitely hear more about how “easy” it is to invest and make a killing. But in reality, those who deal regularly in foreclosures know that making a profit can be tough, and that’s true even for individuals with close ties to lenders and public officials and lots of experience. Here’s a look at the foreclosure process and how it works.
What is foreclosure?A foreclosure happens when a buyer defaults on their payments and the lender takes formal legal action to seize the property. Foreclosures have accelerated not only due to a downturn in the economy that’s affected home sales, but because many homeowners were tripped up by adjustable-rate mortgages that moved to higher payment levels that they could afford. State rules govern this process, but generally, when a lender decides to foreclose on a property it files a notice of default or a lis pendens (Latin for “lawsuit pending”). This document is a public record, and for buyers – including other lenders — it’s the first step in locating a property in foreclosure. A buyer looking for foreclosures can look online for lists of properties in default, but it’s particularly important to double-check these listings.
Do all troubled properties have to be in foreclosure to be sold? Actually, no. You will hear about “pre-foreclosure” or “short sale” properties put up for sale by lenders who have entered into agreements with troubled homeowners who elect to give up the property to avoid a foreclosure on their credit report.You will also hear about such sales being done by intermediary companies who claim to deal in these transactions. Some are legitimate, some are not. Check them out.
How do people invest in foreclosure properties? There are three primary ways this happens. First, you will see buyers coming in at the “pre-foreclosure” stage. Second, you will see buyers going after “REO” (real estate owned) properties – literally foreclosed real estate still on the books of a lender. Third, you’ll see foreclosures auctioned off at the public courthouse or in private auctions, depending on how the lender wants to market such properties to get them off their hands. Each process has its own conventions for inspecting the properties – sometimes prospective buyers get time to inspect what they might buy, other times little or none.
Can I borrow to buy foreclosures? If you have to borrow money to buy foreclosed or other troubled properties, you might not want to get involved at all. While the typical purchase of a home involves mortgage financing that takes weeks to secure due to credit checks and other factors, the sale of foreclosure properties is typically a fast-moving process that requires no-strings financing. Bottom line, lenders like cash. There’s another good reason to enter this process with cash instead of debt. Even sophisticated foreclosure investors often discover ugly surprises when buying – property with greater damage than they anticipated, for example – and they may not have the flexibility to borrow to fix those unexpected problems after they borrowed to buy in the first place.
So, how do I educate myself? Start with some solid advice about your personal finances and your tax situation. A Certified Financial Planner™ professional can help review your circumstances and how prepared you might be for this risky form of investment. Beyond that, it’s a process of learning how various lenders in your community deal with pre-foreclosure and foreclosure property and how public officials and private auction houses in your area handle the auction process for such property.Generally, this is knowledge that will take time to obtain since all the parties involved in this process are busy and besieged by many like you who want to learn. Be patient, take the proper time to study the process and don’t spend a dime until you do.
In a widely anticipated move, The Fed has elected to keep the federal funds rate, that is, the rate that banks charge each other at 2%. Although intended to stave off inflation and temper downside risks to growth, the market responded today sending a clear signal that inflation is still a chief concern.
We expect the volatility in interest rates to continue as it is very likely that the Fed will leave they key rate at 2% for the rest of the year.
Please feel free to contact us if you have questions or concern about how this may effect you.
On Wednesday, President Bush signed a massive bill intended to help the struggling housing market. Among the new changes, the bill includes legislation aimed to help homeowners facing foreclosure to refinance in to more affordable government-backed loans. The bill also contains measures to aid Fannie Mae and Freddie Mac- both of whom find themselves in financial trouble.
The Associated Press has reported today that, “House foreclosures rose fourteen percent in the second quarter and more than doubled compared to the same period a year ago.”
Typically, bad news for the economy is good news for interest rates. However, given the current state of the economy and volatility in banking we have not seen rates improve as they should. Recently, we have read that some analysts believe we may see rates drop in the mid to low 5% range by the end of the year. I am not sure if I agree with this assessment.
What is clear is that their is a lot of uncertainty about the future of our economy and the state of the housing market. With that said, ABBA First Mortgage, Inc. is positioned well to weather this economic storm and we remain steadfast in our commitment to serve your mortgage needs with not only the lowest rates but also the lowest closing costs.
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