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After what seemed like an unstoppable rise since the beginning of the year, long-term mortgage rates have since plummeted in an equally relentless manner.
But even the impact of adjustable rates is softened by the extensive use of negative amortization mortgages, which grant homebuyers a low initial “teaser rate” by allowing them to pay less interest than is owed and to add the unpaid remainder to the loan balance.
Nonetheless, the decline in mortgage rates is doubtless providing at least a little relief to a housing market on the ropes.
Perhaps even more relevant to potential negative amortization borrowers are the recently released federal guidelines on non-traditional mortgage lending. Check back soon for more detail on these new regulations.
– RICH TOSCANO