| Subprime Loan Impact
"Nightmare on Main Street" [March 10] missed the point about the skyrocketing increase of home prices since the beginning of this decade, which was caused more by the Fed's continuous rate cuts than by the rampant and reckless release of subprime loans. In my neighborhood, a condo's market value catapulted from $150,000 to $400,000 in less than two years, effectively pricing out of the market many medium-income earners like me. Is such a price quantum leap normal, when I, a tenured college professor, can't even afford a modest one-bedroom studio? What is happening to the housing market today is its rational return to normal. It is a misnomer to call it a crisis. When a person's high fever is subsiding, his condition is improving, not deteriorating. Daan Pan Diamond Bar, Calif.
Economy - Wednesday
U.S. mortgage applications soar The Mortgage Bankers Association's index of applications jumped 48.1% last week to 965.9, the highest since early Feb. Refinancings spiked 82% as borrowing costs fell and homeowners scrambled to get out of adjustable-rate loans. Home purchase applications rose 10.6%. Average 30-year home loan rates fell 0.24 percentage point 15 5.74%, the lowest since early Feb. .
Opponents weigh in on BofA's takeover
Community groups are lining up against Bank of America Corp.'s takeover of troubled mortgage lender Countrywide Financial Corp. unless the bank details its plans to stave off impending foreclosures. In comments filed with the Federal Reserve, the groups also want the regulator to hold public hearings in California on a $4 billion deal that would make the Charlotte bank the nation's biggest mortgage lender and bring it nine million more customers. Of nearly 80 comments sent to the Fed, most expressed concern about the acquisition, according to letters the Observer obtained under the Freedom of Information Act. The public comment period ends Monday. The acquisition's outcome could play a bigger role in the U.S. housing crisis than any foreclosure plan making the rounds in Washington, said Kevin Stein, associate director of the California Reinvestment Coalition.
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