Adjusting to the Free FHA Rate

Article Abstract:

Single family housing boomed following World War II, and the mortgage market used nearly all its funding for it. During the 1970s, inflation boomed and single family funding was replaced with a concentration on real estate as an investment. Mortgage banking will be substantially altered by the Housing and Urban Rural Recovery Act of 1983. One part of the legislation speaks to interest rates that are fixed by the borrower and the financial institution, which would mean the end of the FHA rate ceiling. Market conditions of supply and demand will impact rates. The new legislation does not alter the ways in which the VA handles the rates on its loan guarantee program. Mortgage bankers are now in a positive competitive spot. In 1983, mortgage bankers initiated just about the same amount of convention as FHA loans, both more than five million dollars. The GNMA II program, which features a chance to combine loans at different rates in one deal, and pooling and marketing prorated shares of multiple issuers, is expected to be popular.

Marketing, Housing, History, Deregulation, Mortgages, Finance

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Market Impact of a Free FHA Rate

Article Abstract:

In December of 1983, the Federal Housing Administration (FHA) insured mortgage loan rate was allowed to float free. There was concern in the housing and mortgage industries as to the affect this would have on housing prices. Now, more than one year later, it seems that the freeing of the FHA interest rate has caused the pricing of new housing to fall. This has multi-faceted advantages for the home-buying consumer as well as the housing industry. Mortgage bankers will be feeling the reverse effect because the pricing structure for mortgages is tied to the size of the loan. Any reduction in price causes profits to fall. Mortgage bankers must increase volume to maintain the same dollar revenues. Relative pricing structures are potentially disastrous in a deflationary environment. Charts are included.

Evaluation, Prices and rates, Pricing, Environmental impact analysis

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All eyes on Seattle: upcoming trade talks could impact your business

Article Abstract:

The 'Millennium Round' of trade negotiations, to be launched at the meeting of the World Trade Organization in Seattle, WA, in late 1999, will have a significant impact on the work of real estate agents. This is because real estate is becoming an increasingly international business.

International aspects, Column, Real estate industry

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