Feds Adjust Prime Down to Stabilize Rising Foreclosures

Although foreclosures in the state of Hawaii are up, 145 filings in August 2007 compared to 42 in August 2006, Hawaii continues to rank in the bottom nationally. These numbers are provided by RealtyTrac of Irvine, California. Much of the problem that has lead homeowners into foreclosure are the rising rates on adjustable mortgages now that the low teaser rates have expired and rates are adjusting dramatically higher. For those sub-prime borrowers who were seduced by exotic loans that allowed them entry into the market, the upward rates are more than they are able to bear. In addition homeowners are having difficulty refinancing these loans since the market prices in many areas of the country has dropped.
As a counter balance to the growing foreclosure problem, the Feds issued a dramatic slash to key interest rates.Although it takes some time for the market to feel the benefits of the cut, a 4.75 % is looking much better than the previous 5.25%. This is a Federal rate that banks charge each other for overnight loans.The prime rate also sets the mark for rates on home equity loans and credit cards.This rate may also effect car loans and some mortgages helping buyers.
It is clear from this action that the Federal government wants to put a stop to a housing market that is bottoming out, and wishes to stabilize business hiring and investment in order to keep the market growing as it has for the past six years.
Once again, Hawaii continues to show a healthy balanced market for both Buyers and Sellers. If you are interested in making a purchase or selling at this time, you can count on Trinity Properties to have the market knowledge and insight to help you make those big decisions in this changing times.