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Mortgage Bail Out May Help Central Oregon Home Loans

Tuesday, 09 September, 2008

A day after a dramatic change in the home loan industry with the government seizing control of Fannie Mae and Freddie Mac, some positive news for Central Oregon residents trying to secure a home loan. Those two companies reportedly own or guarantee a combined five trillion dollars in home loans, roughly half of all loans in the US. So far for the regular home borrower, that means good deals.

"Today mortgage rates have improved dramatically, at least a half a point, for a regular 30 year fixed rate mortgage," says Andy Zook of the Arbor Mortgage Group.

On a two hundred thousand dollar mortgage, that half point move will offer a savings of about sixty dollars a month or seven hundred and twenty dollars a year. Those lower rates have suddenly made homes more affordable for buyers.

"So that's pretty dramatic, so hopefully that will allow more people to be able to refinance or just put more money into their pocket," Zook says.

The federal take over comes after many financial institutions have seen substantial losses due to the slumping housing market. Washington Mutual, one of the nation's largest savings and loans, announced it would replace its CEO of the last eighteen years. Meanwhile other local banks, like Umpqua Bank, are reassuring customers that their mortgage business is strong and continues to grow.

"Put together some safe guards as far as making sure we don't have a lot of exposure to some of the mortgage risks taking that has gone on out there," says Umpqua's Diana Becerril.

Those safe guards include the use of internal loan officers who do not approve non-traditional mortgages.

Source: http://kohd.com/