Path: bloom-picayune.mit.edu!snorkelwacker.mit.edu!news.media.mit.edu!americast.com!americast.com!usa-post Newsgroups: usa-today.real,americast.usa-today.real From: usa-post@AmeriCast.Com Organization: American Cybercasting Approved: usa-post@AmeriCast.com Subject: real Tue, Sep 15 1992 Date: Tue, 15 Sep 92 04:23:48 EDT Message-ID: 09-15 0000 DECISIONLINE: Real Estate USA TODAY Update Sept. 15, 1992 Source: USA TODAY:Gannett National Information Network PREPAYING IS USUALLY GOOD MOVE: Prepaying a mortgage is almost always a good thing to do, but experts do have some words of caution for borrowers considering accelerating their payments. Author Marc Eisenson said Monday that borrowers should keep cash available for emergencies and other expenses. Someone who prepays a mortgage and gets burned in other investments probably won't save much and might even be worse off. (For more, see special Prepay package below.) GROUP TO HELP DISASTER AREA: The National Association of Home Builders will "lend whatever assistance is possible and necessary" to the clean-up and rebuilding effort in South Florida following the destruction wreaked by Hurricane Andrew, officials announced Friday. NAHB officials spent Friday surveying the devastation and meeting with leaders of the Builders Association of South Florida. BUILDERS ANNOUNCE PLAN: The National Association of Home Builders announced Friday its plans to help out in the wake of Hurricane Andrew. Among them: HUD Secretary Jack Kemp has been apprised of what can be done in the areas of finance and federal programs to help rebuild; legislation with respect to disaster relief is being monitored; and ways that system-built housing can be sent are being explored. CONSTRUCTION GROUPS JOIN: Four of Europe's biggest construction groups plan to to form a joint venture to bid for large European infrastructure projects, they announced Monday. The four companies, GTM-Entrepose of France, John Laing of the United Kingdom, NCC of Sweden and Strabag Bau of Germany, will form Societe Europeenne de construction, a joint venture company based in Brussels. MORTGAGE PASSTHROUGHS GAIN: Mortgage passthroughs gained about 1:4 Monday in tandem with the Treasury market's rally in the wake of an unexpected German interest rate cut. Yields on mortgage securities managed to remain unchanged or narrow against comparable maturity Treasuries, indicating that prepayment concerns haven't wiped out demand entirely for low-coupon mortgages. BANK OF BOSTON TO SELL PORTFOLIO: Bank of Boston Corp. said it formed Prism Properties Inc. to market its "Other Real Estate Owned" portfolio, Bloomberg Business News reported Monday. The bank said Prism's development is the latest move in its efforts to sell properties in its OREO, or real estate in foreclosure, portfolio. Bank of Boston said its OREO assets total $400 million, down from about $600 million on June 30. DOCK AND CANAL REPORTS LOSS: The Chicago Dock and Canal Trust, a publicly held real estate investment trust, Monday reported a net loss for its first quarter ended July 31, 1992 of $981,000 or $.17 per share. This compares to a loss of $.20 per share reported in the prior quarter. The earnings improvement is primarily due to the increased leasing activity at Chicago's Cityfront Place. FIXED-RATE MORTGAGES DROP: The rates for 30-year fixed-rate mortgages from the Federal Home Loan Mortgage Corp. were listed at 7.84% Monday, down from 7.94% Thursday. Rates were not available from last Monday because of Labor Day. They were at 9.02% a year ago. For 30-year adjustable-rate mortgages, the rates were 5.15%, down from 5.24% Thursday. A year ago they were at 6.78%. ARM INDEXES DECLINE: The one-year Treasury ARM index rates were listed at 3.17% Monday, down from 3.52% Thursday. A year ago they were at 5.58%. For the 11th District ARM index, rates were at 5.258%, unchanged from Thursday. A year ago they were at 6.998%. T-BONDS INCREASE: Treasury security rates for the 30-year bonds showed an increase Monday, listing at 7.25%. That's up 0.01 from rates of 7.24% Thursday. A year ago T-bonds were at 7.92%. SPECIAL PACKAGE ON PREPAY: TAX DEDUCTIONS ARE CONCERN: Tax deductions should be a concern for those who prepay a mortgage, said Laurence Hope of Westmor Financial on Monday. Although most people come out ahead when prepaying, Hope said some people with high incomes might be better off paying the interest and taking deductions. These people should consult with their financial planner or accountant. SOME MORTGAGES HAVE PENALTIES: Some - though very few - mortgages have prepayment penalties. Hope said a borrower should see if they'll be penalized for paying early. And borrowers shouldn't think they can skip a payment because they have made extra payments in the past. Even if someone prepays a loan and are thousands of dollars ahead of schedule they are still required to make the regular monthly payment. PREPAYING LOWERS INTEREST: Prepaying the principal on a mortgage will lower interest costs for the rest of the time a loan is carried, and this can add up to tens of thousands of dollars in savings over the life of a loan. And, as an added benefit, the mortgage will also be paid off sooner: Making the equivalent of one extra monthly payment a year can knock about 7 to 9 years off the life of a 30-year loan. (End of package.) Real Estate Editor: Martin Baucom. (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. Redistribution to other sites is not permitted except by arrangement with American Cybercasting Corporation. For more information, send-email to usa@AmeriCast.COM