Stocks rebounded this week as a drop in oil prices on concerns that a slowing economy will lower demand for fuel helped offset concerns about inflation.

Wells Fargo decided to boost its dividend which countered concerns about the health of banks. Wells Fargo said its 2nd quarter earnings fell 22% but beat Wall Street expectations. Their stock went up 19%.

Federal Reserve Chairman, Ben Bernanke told Congress that mortgage giants Fannie Mae and Feddie Mac are in no danger of failing. The Bush administration is asking Congress to temporarily increase lines of credit to both institutions and to let the government buy their stock. The Fed has offered to let the companies draw emergency loans.

The Fannie Mae and Freddi Mac troubles came on the heels of the failure of IndyMac Bank.

With good news in the stock market, bond prices declined and rates went up. Conforming 30 Year Fixed is at 6.125%, Conforming Plus/Agency is at 6.25% and Jumbo is at 7.75%. I have a great 5 year interest only loan with 20% down up to $1,000,000 at 5.875%. Higher loan are available with more down payment but the rate stays at 5.875%.

World/Wachovia announced this week that they are waiving the prepayment penalty on all pick-a-pay/pay option arm loans. These loans that closed in the past several years have currently adjusted to the mid 5% with the lowering of the short term rates. They would like to see these borrowers move into the higher fixed payment loans. Huntington Harbor real estate and mortgage rates.

Let me know if you have any more questions!
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Susan Van Wagenen
Terra Mortgage
Phone: 714-323-5559
Fax: 714-242-9666