ARMs and interest-only mortgages take over mortgage market

An experienced guide to the world of finance
providing tools and information that help make
best financial decisions

		My FinanceGates.com		Register

Home

News |

Banking

News & Commentary

News

Reviews

Columnist Articles

RSS News

Economy

Economic Charts

Financial Calendars

Banking & Loans

Loan Rates

Deposit Rates

Rate Alert

Banking Top Rating

Education

Banking

Investing

Stock Brokerage

Dictionary

Financial Directory

Banking

Funds

Insurance

Stock Brokerage

Billing

My FinanceGates

MLS Canada

Market News	Insurance	Billing
Banking	Business News	World News
Funds	Brokerage

Tuesday May 17, 02:43

ARMs and interest-only mortgages take over mortgage market

(by Julia Jenson)

Send link to friend

The housing market is hot, which cause people to stretch their means to buy a new house, the report of the Mortgage Bankers Association reveals. This is revealed through an increase in adjustable-rate and interest-only mortgages that constituted two-thirds of mortgage loans originated in the second half of 2004.

"The situation with interest-only ARMs is just one of several very scary things going on in the mortgage industry," says Stu Feldstein, president of SMR Research Corp., a market-research firm in Hackettstown, N.J.

The trend is especially noticeable in the hot markets such as Florida or California where borrowers are turning to ’special’ mortgage forms such as interest-only mortgages or zero-down payment as people realize that they allow to borrow more and to afford houses they would not have been able to afford with regular 30-year fixed-rate mortgages.

According to the Mortgage Bankers Association’s survey, the interest-only and ARM share of mortgage originations rose to 17% for interest-only loans and 46% for loans with adjustable-rate but without an interest-only feature, based on the total number of loans originated in the second half of 2004. This stretch has generated fears that a string of defaults may be triggered by rising interest rates.

All banking news

Read the related news and articles:
19 May 2005 03:01 PM	U.S. mortgage rates fell to 5.71% last week: Freddie Mac
19 May 2005 07:50 AM	Regulators prepare new guidelines on credit-risk management of first-time mortgages
19 May 2005 07:48 AM	Letters of credit increasingly used to finance property investment
18 May 2005 01:32 PM	U.S. home mortgage applications tumbled 10.5%
17 May 2005 10:36 AM	Home-equity lenders urged to use caution

SUBSCRIPTION

Join FinanceGates.com mailing list and get news and financial advices on home finance, auto finance, insurances, funds, online payments and much more.

Copyright © FinanceGates.com - independent financial advice and personal finance advice, an InternetGates.com company, 2003-2008. All rights reserved.
Finance Gates provides personal finance advice on banking, insurance, investing and billing.
Reading materials of this site you can be sure that you get independent financial advice.