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As Regulators Shut Down Seven More US Banks, Total Reaches 52.

R. MAK. — Sun, 05 Jul 2009 20:06:03 +0000

Total number of failed U.S. banks has reached 52 during the year 2009 as seven more banks have been shut down by the bank regulators, this Thursday.

During the 2008-2009 banking crisis this was the largest number of bank failures in one week, it has exceeded the previous record which was five bank failures in a week and that record has been set just last week.

The Street .com’s recent list of 89 undercapitalized banks and thrifts had included all of the seven failed banks. All the five banks that failed last week were also included in that list.

In an unusual twist, the headquarters of six of Thursday’s seven failed banks were in Illinois, and all these six failed banks were subsidiaries of holding companies that are in a private control of the Campbell Group, through what it was described by David Barr, the spokesman of FDIC described as “fairly complex layers of ownership.”

Similar business strategies have been followed by all six of the failed Illinois banks. They were all having heavy concentrations in collateralized mortgage obligations (CMOs), commercial real estate loans and other commercial and industrial loans. All six have faced the removal of their capital from losses on the CMOs, few of which were in default, as well as loan losses.

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Bankrate.com reviews terms and conditions of credit card issuers

R. MAK. — Sun, 05 Jul 2009 19:30:25 +0000

Before that the industry reforms take a practical shape in February, the consumer Web site Bankrate. com has presented some guidelines for those people who wish to choose a credit card for them.

In order to release these guiding principles, a small review of the 20 platinum and rewards cards that are issued by 10 credit card companies have been conducted by the the Bankrate.com. The names of those ten companies are – American Express Co., Bank of America Corp., Capital One Financial Corp., JP Morgan Chase & Co., Citibank N. A., Discover Bank, First National Bank of Omaha, USAA Federal Savings Bank, U. S. Bank and Wells Fargo.

The most basic terms and conditions of the issuers have been evaluated by the Bankrate.com. It has been founded by Bankrate.com that average late fee charged by the most of credit cards ranges from $20.70 to $38.50; an average fee of $32 is charged for exceeding limit; and an average balance transfer fee of 3 percent is being charged.

While 3 percent on cash advances is being charged by six out of ten cards; for phone payments most issuers charge a fee from $10 to $15. In addition to this, for a copy of the borrower’s credit card statement seven out of ten issuers also charge $3-10; and the grace period offered by most of them is 20-25 days’.

Making the above analysis of the ten leading issuers of credit cards as the base it is said by Ellen Cannon, who is the managing editor at Bankrate.com, that he has come up with a ‘practical rule,’ for choosing a card, and that rule is: “Look for the ones that charge the lowest fees!”

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Mortgage Interest Rates Trend: Historical Graph for the National Average contract Mortgage Rate 1963-2009

R. MAK. — Sun, 05 Jul 2009 15:58:00 +0000

Here in this article we are presenting the National Average contract Mortgage Rates from the year 1963 up to the year 2009.

Following the above graph which starts from year 1963 as you can see that the National Average contract Mortgage Rate was 6% and after the year 1965 we can see a rise in the rates and the rates continues to rise up till 1970 when the rate was above 8% after that there was a fall in the rates till 1972 and after that the rates again rises and from the year 1974 to 1977 the rate was quite stable.

Soon after this year we can see a huge rise in the rate and the rate reach its peek in the year 1982 at that time the rates were in between 14% to 15% and soon after that the rates continues to fall and reach the lowest ever recorded rates in the year 2009. During this period of 1982-2009 we can see ups and downs in the rates but the decline in the rates was more than the rise in the rates.

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Mortgage Interest Rates Trends: Historical Graphs for 30 Year FRM 1971-2009

anney — Sat, 04 Jul 2009 16:34:41 +0000

In this article we have given the 30 Year mortgage rate trends from the year 1971 up till 2009. The graph below shows the rates of 30 Year FRM and the prime rates.

Following the above graph which starts from June 1971 the rates of 30 Year FRM was in between 7% and 8% where as the prime rates were in between 5% to 6% after that the 30 Year FRM rates were quite stable up till June 1973 but soon after that it rises up to 9% then there we can see a little drop in June 1974 and then after that it again rises up to 10%.

After that there were ups ad downs in the rates but to a very small extent this continues up till June 1978 after which there was a huge rise in the rates and the rates reach up to a level of more than 16% before June 1980 after which the rates decline to a greater extent the same year and then it again rises crossing the limit of the previous high rates and the rates that we have seen during the year 1981 and 1982 are the highest rates that have ever been recorded from 1971 up till now and that rates reaches up to 18%.

After this year the rates continues to fall up to June 1983 and then it again rises in the years 1984 and after that the rates decline up to 9% before June 1987 and after this year we can see so many ups and down in the rates from June 1987 up till now but during the whole period mostly we see a fall in rates, we have seen rise in rates also but they just rises up to a considerable limit and in June 2009 the rates came to the lowest ever recorded level and that is up to 5%.

Now if we talk about prime rates in June 1971 the rates were in between 5% to 6% then in 1972 the rates fall below than 5% then we saw that the rates rises up to 12% in the year 1974 and after that the rates declines and were located in between 6% to 7% in 1977 and after that we can see a huge rise in the rates and it reaches up to 20% in the year 1980 and then in the same year the rates greatly falls and then again rises and in June 1981 the rates were at their peek crossing all the highest ever recorded rates from 1971 to 2009. After that year we can see big ups and downs in the rates sometimes the rates increases too much and sometimes there is a great decrease in rates. In June 2009 the rates were at their lowest ever recorded level and that is 3%.

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Treasury’s Distressed Debt Plan Said to Begin With $20 Billion

anney — Fri, 03 Jul 2009 18:10:59 +0000

The US Treasury Department may initiate its program in order to encourage purchases of mortgage-backed securities from banks with about $20 billion in public and private money. This has been down as much as $100 billion from what it was announced in March, it was said by two people who were familiar with the matter.

The treasury has planned to provide $1.1 billion in capital to eight to 10 money managers which it will pick for the Public-Private Investment Program, according to the people, who have asked that it should not be identified before the details are announced. $1.1 billion each will be raised by the firms for funds to buy distressed mortgage securities. This is less than what they had expected from the government to support. About $10 billion in government-backed loans is also included in the plan.

This program has been unveiled by the government when losses tied to home loans hobbled banks such as Citigroup Inc. and Bank of America Corp. and threatened to choke off lending required to revive the economy. Since then, more than $100 billion were raised by the 19 largest US banks. For doing this they sold equity and assets, swap preferred shares for common and offer debt, easing concern that the lenders will not be able to handle a deeper, longer recession.

A separate portion of PPIP was postponed indefinitely last month, which was run by the Federal Deposit Insurance Corp. and which has been designed to aid the sale of whole loans from banks to investors. It was said by the Treasury Secretary Timothy Geithner that interest in such kind of US programs may be waning as it improves the market confidence.

Expansion Possible

It was said by Geithner that in March the government might commit as much as $50 billion in public capital just in order to match PPIP funds that is raised by private firms. It has been told by the treasury officials that the program could be rolled out in stages and it can also be expanded over time.

A Treasury spokesman Andrew Williams refuse to comment. It may be announced by the department that the program’s start as soon as next week.

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FOREX VIEW:Dollar Could Firm Within Existing Ranges Next Week

anney — Fri, 03 Jul 2009 17:45:19 +0000

While that the changes that has taken place will likely hold, with traders that are waiting for fresh incentives so that currencies could be pushed in new directions, as the summer vacation season begins to reduce trading flows and volatile trading is possible.

Key events that could have their effects on currency markets next week include the summit meeting of leaders from the Group of Eight countries in Italy which would begin from Wednesday.

On one side the negative correlation between equities and commodities markets and on the other side the U.S dollar that has in recent months governed currency trading will likely remain in play, although it’s not anticipated that it will generate enough momentum to push any of the major currencies out of recent trading ranges.

It is expected that the euro will stay above the $1.39 mark against the dollar but remain below the $1.425 level, although it is believed by some analysts that it could slip as low as $1.375.

It is believed by analysts that the dollar against the yen will be expected to stay above the Y95 level and below the Y100 mark.

Early Friday afternoon the euro was at $1.3984, while that of the dollar was at Y95.95.
George Davis, chief technical analyst for foreign exchange at RBC Capital Markets said that the increased doubt could give a more optimistic outlook to the global economy that gained ascendancy in the last few weeks. It is creating an environment where stocks and commodities could retreat and the U.S. dollar could appreciate against its main rivals.

A policy meeting by the Bank of England is the only major central bank activity scheduled for the week, although it is not expected to alter its current policy stance.

It was said by Woolfolk, senior currency strategist at the Bank of New York Mellon that a continuing resilience has been shown by the dollar despite the recurring talk of developing an alternative reserve currency and other negatives, such as the large U.S. fiscal and current-account deficits.

He further said that all of these factors are weighing on the dollar, but still it remains strong.

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Mortgage Interest Rates Trends: Historical Graph For Long Term Trends From 1984-2009

anney — Fri, 03 Jul 2009 01:57:05 +0000

In this article we have given you the 30 Year FRM and 1 Year ARM rates. The graph above shows long term trends of 30 Year FRM and 1 Year ARM. It shows the mortgage rates trends from 1984-2009.

Following the graph which starts from June 1984 as you can see that 30 Year FRM was in between 13.50-5.00% whereas 1 Year ARM was in between 10.50-12.00% then we see a little rise in the rates in the same year, the 30 Year FRM and 1 Year ARM increases up to 15% and 12% respectively.

After that the rates starts falling and they continued to fall till the beginning of 1987 and then they rise a little bit and then again fall in the beginning of 1988 and then we can see a considerable rise in the rates up till June 1989 and after that we can see that the rates starts declining and that fall in the rates continued till the beginning of 1994.

After 1994 the rates rises and continues to rise till the beginning of 1995 and then we can see a decline in the rates after that there were ups and downs in the rates till June 2000 and after that there was a huge fall in the rates that continued till June 2003.

In June 2003 the 1 Year ARM rate was at its lowest levels, after that we can see that there was a rise in 1 Year ARM rates that continues up till June 2006, after which the 1 Year ARM rates shows very little ups and downs up till now, while the rates of 30 Year FRM shows ups and downs after June 2006 and those ups and downs continued till June 2008 after which the rates comes to their lowest ever seen positions which still continues.

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New Federal Student Loan Benefits Take Effect

anney — Thu, 02 Jul 2009 17:29:36 +0000

CORNWALL – New college student loan benefits took effect on Wednesday. These loans were approved by the last Congress and signed by former President Bush, and they were outlined by Congressman John Hall at a Cornwall High School news conference.

It was said by Hall that the law lowers interest rates on college loans.

He further said that any loan taken out today or later will have an interest rate of 5.6 percent which has been decreased from 6.8%, the rates of college loans was 6.8% in June of last year. Moreover the Hall said that the rates will continue to fall until it is at 3.4 % for loans taken out on July 1, 2011 or later.

The amount of Pell grants for qualifying college students has also been increased by the new law.

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US Mortgage Rates Drop to 5.32%, Freddie Mac Says

anney — Thu, 02 Jul 2009 17:21:35 +0000

This week in the US mortgage rates fell. Easing concern the Federal Reserve decision to lower down the mortgage rates by purchasing mortgage-backed securities was losing momentum.

It was said by mortgage buyer Freddie Mac of McLean, Virginia, in a statement that the average 30-year rate dropped to 5.32% which was 5.42%.While the 15-year rate was at 4.77 %.

Efforts are being made by Federal Reserve Chairman Ben S. Bernanke to lower down the borrowing costs. He has got a $1.25 trillion program to purchase securities backed by home loans.

In the last week FED has kept the size of its buying program intact and also the benchmark rate for federal funds was kept at between zero and 0.25 %. In a statement made on June 24 by the Federal Open Market Committee it was said that the rate will stay at “exceptionally low levels” for an “extended period.”

Inflationary Pressure

Yesterday, a statement was made by Dan Gertner, an analyst at New York-based Grant’s Interest Rate Observer, in an interview, that Last month yields on treasuries rose high enough than assets to become more attractive to investors including high-grade corporate bonds. That initiated a rally that led to the decline in yields and a rise in prices.

It was said by the National Association of Realtors yesterday that the index of signed purchase agreements for homes, or pending home re-sales, had raised 0.1 percent in May, and in June it has been increased up to 7.1 percent.

Last week a huge fall was seen in U.S. mortgage applications since February. In the week ended June 26, there has been a drop of 19% to 444.8 in the Mortgage Bankers Association’s index of applications to purchase a home or refinance a loan. There was a 4.5% fall in purchase applications while a 30% fall has been recorded in requests to refinance.

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Mortgage Interest Rate Trends: Historical Graph for long term trends from 1992-2009

anney — Thu, 02 Jul 2009 10:59:03 +0000

In this article we have given you the 30 Year FRM, 15 Year FRM and 1 Year ARM: Initial Interest rate. The graph above shows long term trends of 30 Year FRM, 15 Year FRM and 1 Year ARM: Initial Interest rate. It shows the mortgage rates trends from 1992-2009.

Following the graph which starts from June 1992 as you can see that 30 year FRM was at 8.50% while the 15 Year FRM was in between 7.75% – 8.50% and 1 Year ARM: Initial Interest rate was in between 5.50% – 6.25%. After June 1992 we can see a decline in all rates and in December 1992 the rates again goes up after that there was a continuous decline in the rates till the December of 1993 after December 1993 the rates continues to rise till December 1994 but during the month of June in 1994 the rates were quite stable.

On December 1994 the rates were at their peek, we have never seen such rates for 30 Year FRM, 15 Year FRM in the whole period form 1992-2009. Soon after December 1994 the rates continues to fall till December 1995. After June 1995 we can see that the rates rise a little bit. After December 1995 we can see huge ups and downs. These ups and downs continue till June 2000. From June 2000 till June 2003 we can see a huge fall in the rates. During this period sometimes the rates rises also but that was just up to a considerable extent.

After December 2003 1 Year ARM: Initial Interest rates were at the lowest recorded rates. Then after June 2003 we again see ups and downs in the rates which lead to a rise in rates and up to June 2006 the rates have raised a lot. After that sometimes there was a rise in rates and sometimes the rates fall but the rates remain I between 4.75% – 7.00% and after December the 30 Year FRM, 15 Year FRM were at the record lowest rates that was below 4.75% and then again in June the rates rises.