Mortgages take a hit

As a reflection of volatile markets, the availability of mortgage finance in struggling eurozone countries has reduced significantly in recent months. Foreign investors looking to land a mortgage for a second home in the eurozone are particularly badly affected. It’s virtually impossible to land a mortgage for a second home in Greece, the country at the centre of the eurozone debt crisis. Portugal is faring somewhat better and a number of banks are happy to issue mortgages for private property, although rates have increased significantly, particularly for remortgage deals – rates for these type of mortgages have seen a hike as high as seven percent. Lending for mortgages in Spain has remained stable, meanwhile, although demand remains lukewarm as investors guard their funds carefully. 

Weaker economic data has also affected North American mortgages. Average rates on 5-year adjustable-rate mortgages hit a record low of 2.96 percent in September. The drop marked the eighth consecutive decrease in average rates, according to Freddie Mac’s weekly survey of conforming mortgage rates.

Another buzzed about mortgage related story in North America is the fact that the Federal Housing Finance Agency, which oversees mortgage market leaders Fannie Mae and Freddie Mac, is soon to file suit against a slew of big banks-including  Bank of America, JPMorgan Chase, Goldman Sachs and Deutsche Bank- on the grounds that they failed to perform due diligence required under securities law, missing evidence that borrowers’ incomes were falsified or inflated.