| Reverse mortgage workshop informs public about the pros and cons
Local residents gathered at the Kernville Chamber of Commerce Jan. 16 to learn more about reverse mortgages. The Prince Financial Corporation representative, Barbara Prince, Bankers First representative Rylan Rozell and Patty Nash of McKenzie and Nielsen provided those in attendance with large packets of information on the ins and outs of reverse mortgages including the negative aspects of entering into a reverse mortgage. The purpose of the presentation was to educate as well as provide financial opportunities for seniors. According to the Reverse Mortgage Page website over 50,000 Americans applied for reverse mortgages in 2006. A reverse mortgage is a way to borrow against the equity in your home rather than a forward mortgage where you are attempting to purchase a home and build home equity by making mortgage payments.
Starting to feel a pinch
Mark Zandi, chief economist at Moody's Economy.com, said the economic signals "are flashing yellow," suggesting that consumers need to take care. Jobs are getting harder to find, while the crisis in the mortgage industry has made it more difficult for homeowners to borrow against their houses, closing down what has been a major source of extra cash in recent years. Consumers' budgets have been squeezed by rising food and fuel prices. Credit card balances surged through the fall months, according to Federal Reserve figures. Now, delinquency rates on consumer loans are rising, the American Bankers Association reported recently. Even companies that cater to higher-income families, such as American Express Co., are feeling... .
Fed's rate cut can't pull home builder stocks out of free fall
Nobody really thought a half-point cut in the short-term rate would bail out the housing or mortgage markets. The move was designed mainly to prevent housing woes from spreading throughout the broader economy. Since the rate slice, a number of other things have happened that affect home builders - all bad. For starters, long-term interest rates have edged up, mainly because investors fear the Fed's short-term rate cut could stimulate inflation. Because fixed-rate mortgages tend to follow long-term interest rates, an increase in long-term rates usually hurts home builders. Last week, a number of the largest builders reported abysmal earnings. Industry giant Lennar reported the biggest quarterly loss in its history - $3.25 per share versus a $1.30 per share profit in the same period last year.
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