Are Second Mortgages the Achilles Heel of a Housing Recovery?
Housing analysts are drawing more attention to one big problem that’s making loan modifications less successful and drawing out efforts to pursue short sales and other foreclosure alternatives: The presence of second mortgages such as home equity loans and lines of credit. [Read the full article]
Rates on 30-year fixed mortgages rose slightly this week, inching above 5 percent, Freddie Mac said Thursday.
The average rate on a 30-year fixed mortgage was 5.01 percent this week, up from 4.98 percent last week. Last year at this time, the average rate for a 30-year fixed mortgage was 5.25 percent.
Rates fell to a record low of 4.71 percent set in early December. They’ve been held around 5 percent by a Federal Reserve program to pump $1.25 trillion into mortgage-backed securities to try to keep rates low and make home buying more affordable. That program is set to end March 31.
Freddie Mac collects mortgage rates on Monday through Wednesday of each week from lenders around the country. Rates often fluctuate significantly, even within a given day, often in line with long-term Treasury bonds.
The average rate on 15-year fixed-rate mortgages rose slightly to 4.40 percent from 4.39 percent last week, according to Freddie Mac. [Read the full article]
IN PRESIDENT OBAMA’S STATE OF THE UNION address last week, one of the few themes that brought cheers from both sides of the aisle was when he declared he hated the bank bailout. By extension, banks and bankers are about as popular as the New York Yankees around New England.
Similarly, there is general agreement that banks are in dire need of reform, ostensibly to prevent a recurrence of the near-meltdown that required the trillions expended by the Treasury and the Federal Reserve. And the urgency appeared to increase in the days following the upset victory by Republican Scott Brown for the Massachusetts Senate seat formerly held by the late Ted Kennedy, a result widely ascribed to voter discontent about the economy. [Read the full article]
A top Federal Reserve official said Thursday he’s worried about the weakness of the economic recovery but doesn’t think the economy will slip into another recession.
William Dudley, president of the Federal Reserve Bank of New York, said in an interview with The Associated Press: “I think we do have a sustainable economic recovery.”
But he added: “I’m less confident how strong that recovery will be.” The odds that the economy will fall back into recession “are low, but not zero,” he said.
To energize the recovery, the Fed has pledged to hold interest rates at record lows for an “extended period,” which some analysts say means at least six months.
Dudley said that with unemployment high and factories operating well below capacity, the Fed can be “quite patient” before reversing course and raising rates. [Read the full article]