News

In order to keep up-to-date in what is going on in the news concerning home equity loans, financing and other money matters, check back on this page often. At Equity Loans, we try to bring you the most recent industry news that may affect your life and your decisions.

NEWS

2007

Subprime mortgage crisis is now the largest worry among consumers, even topping terrorism according to a recent survey. The survey conducted by the National Association of Business Economics has stated that the subprime mortgage crisis threatens to slow economy growth even deeper than the days and months after September 11, 2001. The economy damage because of subprime loan defaults is expected to reach $2 trillion in the U. S. alone.

2006

According to Reuters news service, home loan applications fell 4.6-percent, the week of July 14. The Federal Open Market Committee had previous raised the interest rate a quarter of one point, making it the 17th hike since June 2004.

Consolidation within the home mortgage loan industry will continue to be driven by declining lending volumes according to Countrywide Financial Corporation.

Winner of reality TV show, Survivor: Panama, Aras Baskauskas said he plans to use his $1 million purse to pay off his dad's mortgage.

Home loan activity continued flatlining in late March, a trade association said Wednesday. For the week ending March 24, the Mortgage Bankers Association's Market Composite Index, a measure of mortgage loan application volume, edged up 1 percent from the prior week. But it was down 15 percent from the comparable period a year earlier, the Washington, D.C.-based association said. Neither number is adjusted for seasonal factors.

Consumer demand for home mortgage loan applications fell last week to the lowest level this year despite a marked drop in interest rates, as industry trade group said on Wednesday. The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity or the week ended March 17 decreased 1.6 percent to 565.0 from the previous week’s 574.4, its lowest level of 2006.

Consumers filed fewer loan applications to purchase homes last week despite a drop in long-term interest rates, an industry trade group said on Wednesday. The Mortgage Bankers Association’s seasonally adjusted purchase mortgage index ( considered a timely gauge on U.S. home sales) decreased 1.9 percent to 400.8 for the week ended Feb. 24 from the previous week’s 408.7.

Consumer borrowing rose nationally last year at the slowest pace since 1992 as Americans relied less on credit cards and more on loans against the value of their homes. Consumer credit, or non-mortgage loans to individuals, increased by 3 percent in 2005 to $2.16 trillion, the smallest percentage gain since a 1 percent rise 13 years ago, the Federal Reserve said in a report Tuesday.

The amount of U.S. consumers choosing to take cash out of their home equity will fall sharply in 2006 versus last year due to lower refinancing activity and slower home price appreciation, Freddie Mac said on Tuesday. Home equity extraction from the refinancing of prime first mortgage liens will fall to about $117 billion in 2006 -- less than half the 2005 level of $243 billion, according to Frank Nothaft, Freddie Mac vice president and chief economist.

The number of residential mortgage loans in negative equity rose to about 11,000 cases, with a value of $19 billion in the fourth quarter, the Monetary Authority says. The estimated unsecured portion of these loans stood at $2 billion. Despite rises in two consecutive quarters, the number of mortgage loans in negative equity has dropped 90% from the peak of about 106,000 cases at the end of June 2003.

2005

The Federal Reserve Board's analysis of the Home Mortgage Disclosure Act (HMDA) aggregate data released by the Federal Financial Institution Examination Council concluded that there has been an expanded availability of home loans to all borrowers and warned against making unwarranted accusations of illegal bias which could discourage lenders from participating in the non-prime segment of the market. The analysis also showed that the vast majority of the differences in loan pricing and approval are explained even in the absence of detailed credit factors.

African Americans and Hispanics are far more likely to receive high-cost home loans than whites — and although much of the disparity can be tied to economic factors, the reason cannot be fully explained by existing data, according to a government analysis released Tuesday. The study by the Federal Reserve examined an estimated 80% of all home loans last year. It found that 32.7% of African American borrowers, and 20.3% of Hispanic borrowers, had high-priced loans. By comparison, 8.7% of white customers and 5.9% of Asian Americans had these higher-cost mortgages, also known as sub-prime loans. The report said that economic factors, such as the income level of the borrower, were one factor in the disparity.

Wachovia Corporation, a Charlotte-based company on Tuesday announced its second acquisition in two days, saying it was paying $83 million for San Diego-based lender AmNet Mortgage Inc. On Monday, the No. 4 U.S. bank by assets said it was buying Irvine, Calif.-based Westcorp, a national auto finance company, for nearly $4 billion. Looking for better loan returns, Wachovia is eager to expand its consumer portfolio, which is about 40 percent of its total loans, said Robert Maneri, a managing director with Cleveland-based Victory Capital Management, which owns Wachovia shares.

Many Utahns consider their homes to be the ultimate financial tool: A key asset for retirement and an easy source of credit. The only problem is that you can't have it both ways. “If you want your home to be an asset for retirement, you need to really work on paying it off,” said Salt Lake City financial adviser John Bird. “But a lot of people look at their home as tool to borrow against. And they still expect it to be a key part of their retirement. That's nuts - it doesn't work that way.” An informal poll conducted by Dan Jones & Associates for Coldwell Banker Residential Brokerage in Midvale shows that 70 percent of 524 Utah homeowners considered their homes to be a retirement asset. But 37 percent of respondents considered their residences to be a vehicle for home equity loans.

Citibank Korea saw its outstanding loans and deposits fall by more than 10 percent over the past six months. The commercial bank’s loans recorded 26.1 trillion won in June, down 10.6 percent from the end of 2004. Deposits also fell by 14 percent to 32.2 trillion won.

Lured by booming oil prices and friendly Kremlin ties, Western banks want to extend Russia the largest loans in its history, brushing aside fears of bad debts, the ghosts of fallen YUKOS and high levels of borrowing. The biggest loans include $7 billion to fund Russia's purchase of a 10.7 percent stake in gas monopoly Gazprom, $2 billion for state oil firm Rosneft and up to $10 billion for Gazprom to buy oil firm Sibneft.

Community Banks, Inc. ("Community") (Nasdaq: CMTY) today announced improved earnings performance as it moves toward completion of its previously announced merger with PennRock Financial Services Corp.

Commercial banker SunTrust Banks Inc. on Monday said first-quarter earnings rose 36 percent, lifted by its acquisition of National Commerce Financial Corp., "robust" net interest income growth, and improved credit quality.

Many consumers who want to get rid of their high-interest credit card debt are turning to lower-interest home equity loans to pay off their balances. However, some credit counselors are worried by this development, as missing payments on a collateralized loan, such as a mortgage or home equity loan, can result in losing the home.

Everywhere you go these days, it seems people are talking about the fortunes being made in South Florida real estate. But is it too late to jump on the bandwagon?

Whether consumers are in the market for a new home, already own one, or are considering selling, the May issue of Consumer Reports offers advice about the big changes in the housing market.

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