Path: bloom-picayune.mit.edu!snorkelwacker.mit.edu!news.media.mit.edu!americast.com!usa-post Newsgroups: usa-today.real From: usa-post@AmeriCast.Com Organization: American Cybercasting Approved: usa-post@AmeriCast.com Subject: real Mon, Mar 2 1992 Date: Mon, 2 Mar 92 05:57:42 EST Message-ID: 03-02 0000 DECISIONLINE: Real Estate USA TODAY Update March 2, 1992 Source: USA TODAY:Gannett National Information Network HOMEOWNERS STEP UP PAYMENTS: An increasing number of homeowners are adding money to the mortgage payments they regularly make. The goal is to pay off their loans faster, build home equity and save money on interest. Paying down the balance of a mortgage is the fastest way to build equity now that home prices aren't rising in many areas. A tip: Indicate that it's an extra payment, or the money could sit in escrow. (For more, see special Payment package below.) LOAN DELINQUENCIES DECLINE: Consumer loan delinquencies fell for the fourth quarter, the first drop in nearly two years. The delinquency rate on consumer installment loans - including personal, auto and home-equity loans overdue at least 30 days - fell to 2.58% of all loans Dec. 31, from 2.74% Sept. 30, according to an American Bankers Association survey. The rate is still high. It was 2.57% at the end of 1990. PROPERTY CASE TO BE CONSIDERED: The Supreme Court Monday considers whether South Carolina regulations amount to a "taking" of property for which the owner should be paid under the Fifth Amendment. In 1986, David Lucas bought two prime building lots in Isle of Palms, S.C. In 1988, the state enacted coastal zone regulations meaning that no houses or anything else may be built on his lots, for which he paid $975,000. ESCROW PAYMENTS USUALLY NEEDED: The only way homeowners can get a bank to stop taking escrow payments from monthly mortgage payments is if their state has a law that lets homeowners drop escrow payments. Only the District of Columbia, Illinois and Minnesota do. Payments cover homeowners' insurance and property taxes. The homeowners must have at least 20% to 35% equity in the home before they can stop making the payments. HUD PREDICTS FHA WILL DROP: The Department of Housing and Urban Development's official estimate for FHA volume will drop by 9% in 1992, according to its predictions made in the fiscal year 1993 U.S. budget. The budget calls for "an arms-length Office of Secondary Market Examination" within HUD to supervise Fannie Mae and Freddie Mac activities. MORTGAGE RATES CLIMB: Fixed mortgage rates rose to their highest level in four months, the Federal Home Loan Mortgage Corp. said Friday. The average rate on 30-year mortgages was 8.83% last week, up from 8.82% a week earlier and 9.29% a year ago. One-year adjustable-rate mortgages averaged 5.93%, vs. 5.92% a week earlier and 6.30% a year ago. OPTIMISM FOR ECONOMY SEEN: Investors last month kept up January's trend toward buying stocks that are sensitive to economic swings. Stocks of companies that should pull in higher revenue and earnings when consumers begin to spend again all were winners last month. Among them: Home furnishings and appliances. Sales of those tend to go up along with home sales. GROUP PROTESTS TOXIN LEAKAGE: A group of 30 residents has formed the South Weber, Utah, Landfill Coalition to deal with the federal government over toxins leaking from dumps at Hill Air Force Base into their soil and groundwater. The dumps contain an airplane degreasing chemical and other chemicals. LANDSING DECLARES DISTRIBUTION: The board of directors of Landsing Pacific Fund Friday declared a distribution of 12 cents per share payable on March 23 to shareholders of record as of March 9. This will be the 14th consecutive distribution for the Fund. Landsing Pacific Fund is a publicly held, self-administered, real estate investment company with $137 million in assets. SPECIAL PACKAGE ON PAYMENT: BOOMERS LIKELY TO PAY MORE: Lenders say baby boomers are more likely than other homeowners to add extra money to their required monthly mortgage payment or make an occasional extra payment. They want to finish the mortgage before retirement or children's college bills come along. "A lot of people ... come to us and say, `I'm 40 years old. I don't want a 30 year loan,"' says Jack Lennox of Globe Mortgage Co. LOWER INTEREST RATES PLAY ROLE: Lenders say lower interest rates are behind the trend. Now that money market savings rates are about 4%, stepping up payments can be a more profitable use for savings. Say a homeowner has a 30-year fixed-rate at 8 1:2%. Monthly principal and interest on a $100,000 loan is $769. Total savings for making an extra payment each year: $54,647, plus eight years off the life of the loan. BANKS NOTICE INCREASE: Of the 280,000 loans serviced by Countrywide Credit Industries, about 14% include some type of additional principle payment each month. That's up from about 10% two years ago. At Bank One Mortgage, about 7.4% of its customers are adding extra money to payments. The trend has been building over the last three years, says Craig Hart, chief financial officer. (End of package.) Real Estate: Beth Mann. (1-919-855-3491) Making copies of USA TODAY Update (Copyright, 1992) for further distribution violates federal law. This article is copyright 1992 Gannett News Service. 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