How the Fed Could Revive the Market for ARMs

by Admin 4. December 2015

Below is an excerpt from an article that appeared in National Mortgage News by Brad Finkelstein

December marks seven years since the Federal Open Market Committee cut the target for its benchmark federal funds rate to nearly zero.

The Great Recession technically ended six months after the Federal Reserve's dramatic interest rate cut, though to say the subsequent recovery has moved at a glacial pace would be an understatement.

But as a meaningful economic recovery appears to be finally taking hold, all eyes are on the FOMC amid speculation that it may soon raise rates. That watershed moment, whenever it comes, will necessitate a re-evaluation of many aspects of the "new normal" that have taken hold since the Great Recession.

Case in point: the adjustable-rate mortgage. The product, popular during periods of rising interest rates and home prices — and vilified for contributing to excesses that precipitated the housing crisis — has fallen out of favor among lenders and consumers.

But ARMs may soon be ready for a revival, albeit with tighter regulatory restrictions and a re-calibration of longstanding assumptions about who the product is best suited to serve.

Lenders are already seeing the beginnings of renewed interest in ARM loans. Even exotic variants, like the option-ARM, may have a role to play with the right consumer. "I believe adjustables will make a comeback. "The reason they haven't as of yet is because fixed rates have been so low for so long," said Dave Jacobin, president of 1st Mariner Mortgage, a subsidiary of Baltimore's 1st Mariner Bank.

When FRMs do hit 5%, Jacobin predicts ARM volume will pick up, "but nothing dramatic." Others agree. "But there is a market for ARMs that makes sense," he added.

For example, if a borrower intends to stay in a house for less than five years, a 5/1 ARM offers a lower rate than a 30-year loan and the rate won't adjust before the borrower is ready to move. Even if the borrower stays in the home longer than planned, there are caps on how much the interest rate can increase.

Now, as a new market for ARM loans may be emerging, lenders say they're mindful of the lessons learned during the crisis. "I want to make sure that any borrower I put into that product fully understood the ramifications of the upside and the downside," Jacobin said. Education is the key to bringing the ARM loan back to the mainstream, said Jacobin.

Salespeople need "to make sure they explain every nuance and detail to their customers, describe the worst-case scenario, and make sure the borrower is comfortable with it, and it is not just something where they can get them into a property so they can get a commission."

"It's much more important — and it will benefit them — they make sure the adjustable-rate mortgage products are given to people who it makes sense for them to take it. Frankly that will lead them to a better reputation, more referrals and everybody wins," he added.

Read the full article at NationalMortgageNews.com.

The Branch of the Future is Here

by Jhonell Campbell 20. November 2015

To serve you better, we are proud to announce the opening of our Timonium branch located in the Timonium Square shopping center at 2129 York Road, Timonium, MD 21093. The existing Cockeysville branch closes at the end of business on Friday, November 20th and our new branch will reopen on Monday, November 23rd at 9 a.m. at the new Timonium location.

The new Timonium branch has earned the title “The bank of the future” because of its sleek design and new technology. The branch will include an interactive technology bar, business center, lounge, conference room, and all-in-one ATMs. This branch is not just a space for existing customers; it is a space for the community. The public, including those who do not bank with 1st Mariner, are welcomed to use the conference space and business center to host business meetings, free of charge. The lounge-like environment allows members of the community to have a designated space to collaborate together, even over a cup of coffee.

The relocation and redesign is the first branch of what we plan to use as a model for future growth and expansion.  “We see the relocation as a superior opportunity to connect the Timonium, Cockeysville and Lutherville markets together in one convenient location,” said Wade Barnes, Director of Retail Banking at 1st Mariner Bank. "As Baltimore’s community bank, we want to provide the best facilities, products and customer experience possible, because that is what our customers deserve."

We are excited about this new direction and we invite you to visit the new location to check out all that it has to offer.

25 Before 25

by Jhonell Campbell 2. November 2015

Your twenties is a time of transition and also a great time to set the foundation for your life. Creating a list of goals has helped me keep track of where I am and where I would like to be in my personal and professional life. That being said, here is my list of twenty-five things to accomplish before the age of twenty-five:

Education

1. Earn a bachelor’s degree

2. Earn a graduate degree

3. Read at least 5 self-help books

Finances

4. Have at least 3 months wages in savings

5. Invest in the stock market

6. Own a car

7. Start retirement savings

Career

8. Expand your professional network

9. Earn a promotion at work

10. Perfect your professional wardrobe

Exploration and Adventure

11. Travel to Europe

12. Take a trip to Las Vegas

13. Go on a cruise

14. Take a vacation with your significant other

15. Go skydiving

16. Attend a music festival

17. Attend a wine festival

Service

18. Participate in a marathon or 5K for a good cause

19. Spend time volunteering to a cause close to your heart

Health and Well-being

20. Have a regular exercise routine

21. Develop a relaxing and healthy hobby

22. Learn how to cook more than the basics

23. Try a drastic make over

24. Let go of all people who no longer serve a positive purpose in your life

25. Most importantly, grow to truly love yourself

If you are already past the 25 mark, how many of these items were you able to accomplish before the age of 25?



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