| CUA axes variable loan sales by brokers
AUSTRALIA'S largest credit union is the latest credit crunch victim, suspending sales of all its variable home loans through brokers. Credit Union Australia has told brokers the sales would stop from today, although it would continue to sell the loans through its branch network. "As a result of recent events in financial markets and following a review of CUA's broker distribution model, CUA will temporarily withdraw its variable interest rate product range from this Friday," the credit union said in a note to brokers. CUA is also by far Australia's largest mutual society, with 388,000 members and $6.6 billion in assets. CUA merged last year with the Australian National Credit Union to form the new entity. It was named credit union of the year this year by Money magazine.
Seattle Investor Group Calm as Markets Swing
It certainly could be. Thirty-year fixed-rate mortgages have been dropping since Christmas. The average is now 5.5 percent, quite low by historical standards. So if you have an adjustable rate mortgage that's going to reset, now could be an excellent to time to swap into a fixed-rate loan. Lending standards have changed since the "anything goes" days of the housing bubble that burst last fall. "Here's why," says Greg McBride, senior financial analyst with bankrate.com, a personal finance Web site. "There are actually standards now. Instead of the loan requirement being the ability to fog a mirror, the people now in the best position to get mortgages have good credit, proof of income and either money for a down payment or equity in an existing house." Lower interest rates will take some of the sting out of adjustable rate loans that are resetting higher.
Fed's rate cuts ignite a rush to refinance
A positive note in the chorus of bad economic news sounds loudly, like a call to arms. Or, as happened after the Federal Reserve dropped short-term interest rates three-quarters of a percentage point Tuesday, a race to refinance. The refinancing frenzy began right after the Fed's announcement, local brokers and bankers reported. The 10-year Treasury bond rates on which fixed mortgages are based also fell, and interest rates for 30-year loans plunged as far as 5.125 percent, the lowest level since spring 2004. On Jan. 1, the 30-year fixed rate averaged 6.07 percent; it has ranged between 6 percent and 6.5 percent for two years. Though the number of refinancing applications will not be available until Wednesday from the Mortgage Bankers Association, newspaper and television accounts from Bangor, Maine, to Los Angeles described a boom in activity.
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