Tuesday

Canadian residential mortgage rates rising

Mortgage rates in Canada are heading higher as fears of inflation grips the bond markets. Canadians received more proof yesterday of the global credit crunch hitting home after this country's biggest banks began hiking their residential mortgage rates in an effort to recoup higher funding costs from their customers. In Canada this week a number of banks raised mortgage rates, and it's a matter of days before others follow. Effective Friday, a five-year mortgage increases by .35 of a percentage point to 7.2 per cent, while a three-year closed term rises by the same amount to 7.05 per cent. A one-year closed mortgage loan falls by .3 of a percentage point to 6.35 per cent. The interest rates on mortgages and other short-term borrowing are set based on the price of bonds. With lower demand for bonds and fears of inflation, rates have to rise to lure investors. Other interest rates in the economy - from consumer and car loans to mortgage rates tied to the prime rate - are affected by the Bank of Canada trend-setting rate, which is expected to fall or remain stable over the next few months at least.

Thursday

30-year mortgage rates fell, aplications rise

Mortgage rates fell again this week, sending the rate on the 30-year fixed-rate mortgage down for a fifth straight week to its lowest level since February, Freddie Mac reported. The Mortgage Bankers Association's index of applications to buy a home or refinance a loan increased 33.4 percent to 661.7 in the week ended Sept. 12, the highest level since May. any homeowners sought to take advantage of lower interest rates and refinance their mortgages last week, causing the total volume of mortgage applications filed to jump. Applications were still down 1.3% in the week ending Sept. 12, compared with the same week in 2007. The government's pledge to backstop mortgage financiers Fannie Mae and Freddie Mac and stand behind their debt provides reassurance to investors that the mortgage-backed securities issued by the companies are relatively safe investments.

AIG Insurance Clients Safe?

Americans who have put their savings into life insurance and annuity-linked pension funds were running scared as finance titans like AIG collapse.In a statement, American International Group (AIG) said it is operating normally with adequate capital and is fully capable of meeting obligations to policyholders. In the unlikely event of an insurer failure, policyholder claims would be given priority over those of other creditors, according to a statement from the National Association of Insurance Commissioners. Until the past several months, American International Group was viewed as one of the safer investment bets on Wall Street – as well as one of the top insurers on Main Street.

Saturday

Mortgage rates drop after govt bailout

The federal bailout of mortgage giants Fannie Mae and Freddie Mac has resulted in a sharp and sudden drop in mortgage rates. Fannie Mae is short for Federal National Mortgage Association, Freddie Mac is short for Federal Home Loan Mortgage Corporation. They act as guarantors for mortgages. Since the government seized control of Fannie Mae and Freddie Mac, mortgage rates have dropped sharply, but there are questions about what it means for the housing slump. The average rate on a 30-year fixed rate mortgage dropped to 5.93 percent from 6.35 percent a week ago, Freddie Mac reported Thursday. That's a five-month low.

Monday

Bush Helps Fannie Mae and Freddie Mac

The Bush administration on Sunday said it was taking over Fannie Mae and Freddie Mac. Fannie Mae and Freddie Mac are entities created by Congress - that operate like private companies with shareholders and corporate boards - to finance and guarantee home loans in the United States. Together, the companies hold nearly half of the country's mortgages. The administration said it would funnel billions of dollars in taxpayer money into the companies to help keep them afloat.

Copyright | The Mortgage Man Abbotsford Real Estate