Finance news

Baltimore–Baltimore Mayor Sheila Dixon’s administration will file suit today in U.S. District Court alleging California-based Wells Fargo Bank has engaged in predatory lending practices in black neighborhoods, The Baltimore Sun reported Tuesday.

The potentially groundbreaking lawsuit, which the Sun says could be the first in which a city tries to recoup foreclosed home costs, revolves around allegations that the lender practiced reverse redlining, selling high-interest subprime mortgages to black Baltimore citizens more often than to white residents. Reverse redlining is a violation of federal housing law.

Since 2004, Wells Fargo has been one of Baltimore’s two largest mortgage providers. The bank made 1,285 loans a year–cumulatively worth more than $600 million–from 2004 to 2006.

More than 33,000 Baltimore homes have been foreclosed since 2000 payday advance lender. Five times as many foreclosure events, including default notices and foreclosure sales, occurred in Baltimore from the first to the second quarter of 2007.

Most of the Wells Fargo loans that ended in foreclosure were for properties in primarily black neighborhoods and 70 percent had fixed interest rates, which should have allowed the bank to forecast its borrowers would not be able to handle the payments, according to Baltimore city officials.

Wells Fargo said in a statement that its pricing is not affected by race.
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PREDICTED cuts in interest rates will not be enough to stop the Welsh housing market grinding to a halt next year, experts say.

The prolonged housing boom has come to a halt this year amid rising interest rates, the ongoing credit crunch and the introduction of home information packs – bringing an end to around 10 years of fairly unfettered growth.

But, despite further cuts expected next year in the current interest rate of 5.5%, there are no signs that the market’s current mire will shift in 2008.

There was more evidence of a cooling housing market yesterday after mortgage lending slowed further in November, said the British Bankers Association.

The UK’s main high street banks lent ?4.3bn on mortgages in November – ?500m less than the previous month.

While the number of mortgage approvals recovered 4% to 44,811 from a record low in October, the figure was almost 44% below the level of approvals a year earlier.

BBA statistics director David Dooks said, “Mortgage activity is notably lower than this time last year. Judging by the significantly lower number of mortgage approvals in October and November – partly resulting from lower demand, partly from tighter supply – the market is likely to continue slowing in the coming months.”

Melfyn Williams, former president of the National Association of Estate Agents, says although the market has improved on October and November, it will be sluggish for much of next year.

And Mick McGuire, chair of the Council of Mortgage Lenders in Wales, has predicted prices will fall by around 6%.

But both believe the trend is good news for first-time buyers, who have been priced out of the market after almost a decade of double-digit increases in house values http://payday-badcredit.com. They say a flat market will allow salaries to catch up with house prices and enable first-time buyers to gain a foothold.

Mr Williams, a director of North Wales estate agents the Property People, said, “Prices will be static for the next 12 months. It’s not going to go up much and it’s not going to go down much.”

He expects properties to be on the market for around four months next year.

Though this is much longer than the average sale time sellers experienced during the recent boom years, it does not compare to the waits endured just after the recession of the early 90s.

“If you go back to the period between 1993 and 1997, before it really started hotting up, we were putting properties on the market and people were asking, ‘Do you think we’ll sell in 12 months’?”

Several housing market surveys have all shown a slow down in the market over recent months.

Most recently, property website Rightmove said prices in Wales fell by 2.5% compared to last month, placing the average cost of a home in Wales this month at ?180,409, down almost ?5,000 from November’s ?185,072.

Mr McGuire said even though interest rates should come down next year, the only question is whether homeowners will have a “soft landing” with falls of around 6%, or if the market will go into free-fall.

“Is it going to be a dramatic correction like we had in the early ’90s when house prices reduced by 20% to 25% in four years?”

Mr McGuire, who is also director of business development for the Principality Building Society, said “something had to give” after years of unsustainable house price rises.
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Rate Probability: Volatile

Last week, rates ended higher than where they began.  The anticipated Jobs Report showed that 94,000 jobs were added in November- but prior month’s revisions took back 48,000 jobs previously counted in September and October.   This week is shaping up to be another blockbuster, with the Fed’s Open Market Committee meeting on Tuesday.  So where will rates end up?

The week ahead will in all likelihood be as volatile if not more volatile than last week, with the headline economic event coming on Tuesday, when the Fed’s Open Market Committee is expected to lower rates yet again.  The big question on everyone’s mind is whether the Fed will make a 25 or 50 basis point move. 

Remember, a cut by the Fed makes many borrowing rates lower - like Home Equity Lines, credit cards, and other consumer loans - but can often have the exact opposite impact on fixed rate home loan rates direct payday loan cash advance. Why? Because a Fed cut often drives inflation, since spending by consumers and businesses generally picks up in light of lower financing rates. As you may recall, inflation is the number one enemy of bonds, which provides a fixed rate of return and is diminished by inflation.

The bottom line: After the Fed announcement rates are likely to be volatile depending on the amount of the interest rate cut and the wording in the fed’s statement.  Hold on to your hats!

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