Sharpest Mortgage Rate Jump Since Oct 1987 - Posted by J.P. Vaughan

Posted by mark on October 11, 1998 at 05:08:09:

A little less lending but a lot more profits. A good formular
for recessionary times. Less will be saved and less will be available.
There will be more risk and more chances to make big money.

Just a thought


Sharpest Mortgage Rate Jump Since Oct 1987 - Posted by J.P. Vaughan

Posted by J.P. Vaughan on October 10, 1998 at 13:16:42:

Sharpest Mortgage Rate Jump Since Oct 1987

Volatile financial markets and a weakening U.S. economy
caused the Fed’s to lower the Federal Fund interest rate
by one-quarter percent. In the meantime, within a few days,
mortgage rates have jumped by as much as one-half of a
percentage point or more.

For example, Colonial Savings’ 30-year fixed one-point
mortgage jumped from 6.375% on Tuesday to 7% on Friday.

The Los Angeles Times reported today that average southern
California rates (of mortgages up to $227,150) went from
6.565% Thursday to 6.758% on Friday, up from the 6.153%
level just 9 days earlier on October 1.

This is a gigantic leap for such a short time frame. As
reported in the L.A. Times, some mortgage experts have
called this move “the sharpest since the October 1987
stock market crash…”

It’s also in the opposite direction of the short-term rate

I thought this was rather interesting.


Credit crunch - Posted by Bud Branstetter

Posted by Bud Branstetter on October 12, 1998 at 11:51:10:

Then there was the article in the weekend paper about being the quickest tightening of credit for commercial borrowers in years. The big boys don’t want to be hanging out there when/if Brazil and others start to default. If the credit crunch spreads to residential as well the interest rate may be low but there will not be the easy loans that there have been. With fewer qualified buyers the demand will less and prices will not only not go up but could come down. While I don’t see recession the pressure continues on the deflation side. Owner financing will still be a good coice as well not being over leverage. Do I hear lower LTV ratios for borowers?

Re: Sharpest Mortgage Rate Jump Since Oct 1987 - Posted by Jimbob

Posted by Jimbob on October 10, 1998 at 16:52:37:

They’re not going to do a whole lot of lending that way, or is that the intention?