What is it
The London Interbank Offered Rate is a daily reference rate based on the interest rates at which banks offer to lend unsecured funds to other banks in the London wholesale money market. Most variable mortgages and short term loans are based on this rate. If it goes up your ARM follows.
What it means to you
The LIBOR rates have almost doubled, reflecting the fact that banks percieved so much risk. They didnt know whether the bank they loaned to would be there next week. Now we are watching some encouraging trends, bare beginnings but still positive. Key short-term lending rates fell again Tuesday. Libor, for three-month dollar-denominated loans fell to 4.63% from 4.72% while one-month rate declined to 4.46% from 4.56%. It has to mean that banks are begining to see a little less risk and that is the first step towards loosening credit.
More Good News- California Foreclosures are Down Again
California: Notices of default filings, the first step of a foreclosure process -- fell 61.8 percent in September compared to August and fell 36.4 percent compared to the same month last year, reports data company ForeclosureRadar.com.( via MarketWatch)
The Feds Plan begins to Kick In
- Oct 27th - The fed's commercial paper facility will begin.
- Sometime in Nov - The TARP program will begin buying toxic mortgage backed securities. The banks have already recieved 250 billion in fresh capital and after the TARP auctions, bank balance sheets will begin to look a lot better. Once credit is losser and the financial system is on a better track, we hope that the housing crises will begin to see an early dawn.
No doubt, there is much work in front of us and we are certainly victims to headline events, but maybe we are seeing the early signs of stabilazation. Keep your fingers crossed.
Thanks for Reading
Howard Bell
A web site of over 450 articles related to real estate focused primarily on property management.
http://wwwyourpropertypath.blogspot.com/
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