| Mortgage applications spike after Fed action
U.S. mortgage applications jumped by nearly 50 percent last week as home loan rates fell after the Federal Reserve cut interest rates and took steps to restore bond market confidence, an industry trade group said on Wednesday. The Mortgage Bankers Association's mortgage applications index jumped 48.1 percent to a seasonally adjusted 965.9 in the week ended March 21, its highest level since early February. An 82 percent surge in refinancing applications overshadowed a 10.6 percent rise in home purchase loan requests, lifting total applications from the previous week, when home loan demand sank to the lowest since end-December. "The Federal Reserve acted last week to bring some stability to the mortgage-backed securities market and we saw an immediate impact with a drop in mortgage rates," Jay Brinkmann, the MBA's vice president of research and economics, said in a release.
Falling rates seen having mixed impact on US Alt-A, subprime borrowers - S&P
MUMBAI (Thomson Financial) - Falling rates spurred by recent actions by the US Federal Reserve Bank have had a mixed impact on the US Alt-A and subprime borrowers, according to a recent report by Standard & Poor's Ratings Services. The Federal Reserve Bank's lowering of its interest rate caused the European inter-bank lending rates (one- and six-month LIBOR rates) to fall to its lowest levels in more than three years (2.6 pct and 2.4 pct, as on March 18). Since most hybrid adjustable-rate mortgage (ARM) loans in the US are benchmarked to six-month LIBOR, this decrease could lower monthly payments for ARM loans, lower payment shocks for hybrid ARMs that are due to reset and don't refinance to a new loan with a fixed rate, increased excess spread for RMBS transactions backed by fixed-rate collateral and increased refinance opportunity for borrowers with ARM loans.
(AFX UK Focus) 2008-03-28 05:01 GMT: Falling rates seen having mixed impact on US Alt-A, subprime borrowers - S&P
MUMBAI (Thomson Financial) - Falling rates spurred by recent actions by the US Federal Reserve Bank have had a mixed impact on the US Alt-A and subprime borrowers, according to a recent report by Standard & Poor's Ratings Services. The Federal Reserve Bank's lowering of its interest rate caused the European inter-bank lending rates (one- and six-month LIBOR rates) to fall to its lowest levels in more than three years (2.6 pct and 2.4 pct, as on March 18). Since most hybrid adjustable-rate mortgage (ARM) loans in the US are benchmarked to six-month LIBOR, this decrease could lower monthly payments for ARM loans, lower payment shocks for hybrid ARMs that are due to reset and don't refinance to a new loan with a fixed rate, increased excess spread for RMBS transactions backed by fixed-rate collateral and increased refinance opportunity for borrowers with ARM loans.
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