REAL ESTATE
Mortgage rates rise but not above 5%
Average rates on 30-year fixed-rate mortgages rose to 4.84% this week from 4.78% last week, the eighth consecutive week that rates have been below 5%, mortgage company Freddie Mac said.
The average rate on a 15-year fixed-rate mortgage rose to 4.51% from 4.48%. Five-year, adjustable-rate mortgages rose to 4.9% from 4.8%. One-year, adjustable-rate mortgages rose to 4.78% from 4.77%.
These rates do not include add-on fees known as points. The nationwide fee averaged 0.7 of a point for 30-year and 15-year mortgages and averaged 0.6 of a point for five-year and one-year adjustable-rate loans.
Reverse mortgage subsidy is sought
Falling home prices have forced the government to ask Congress for a $798-million taxpayer subsidy to prop up a program that lets senior citizens tap the equity in their homes.
The government said the Federal Housing Administration needs the money to support a program that lets homeowners older than 62 obtain reverse mortgages, which allow borrowers to convert equity to cash without making payments until they die or sell their home. Interest is then due.
But with the housing market in a slump, participating lenders may not be able to collect the full loan amount from some borrowers. The government, which insures participating lenders, is on the hook if the house is sold for less than the total loan amount.
Standard Pacific posts smaller loss
Irvine builder Standard Pacific Corp. said its first-quarter net loss narrowed to $49.5 million, or 21 cents a share, from $216.4 million, or $3, a year earlier. Revenue declined 40% to $209.5 million. Standard Pacific had $30.8 million of impairments, including $14.1 million for firing 380 workers. Its shares fell 3 cents to $2.23.
Countrywide and KB Home sued
Los Angeles builder KB Home was sued along with Bank of America Corp.'s Countrywide Financial over claims they conspired to rig appraisals to boost sale prices.
Countrywide, its appraisal unit and KB Home inflated home prices by as much as $2.8 billion in Arizona and Nevada during a three-year period, according to a federal complaint filed in Phoenix.
INTERNATIONAL
European bank cuts interest rates
The European Central Bank cut interest rates a quarter of a point to 1% and said it would buy euro-denominated bonds as well as offer longer-term credit to banks as it moves to get more money flowing through the 16-nation euro zone economy.
COURTS
Banks must face Adelphia suit
Bank of America Corp. and Bank of New York Mellon Corp. are among 26 banks that must defend a fraud lawsuit for billions of dollars brought by a trust pursuing claims on behalf of defunct Adelphia Communications Corp.
U.S. District Judge Lawrence McKenna ruled that the lawsuit could go forward against 26 banks and 22 investment banks. His ruling focused on legal issues, not the merits of the case.
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1 comment:
Reverse mortgage is a useful estate planning tool that banks and financial institutions ought to offer making available to seniors. It's a great security for them to ensure the delivery of their pensions in the amounts they thought forthcoming.
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