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The Federal Reserve has driven down interest rates,
spelling large profits for Detroit's mortgage companies.

R.J. KING SPECIAL TO THE JEWISH NEWS

MORTGAGE

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S Woodward • Fitttl Floor • Birm‘righaro, MI 48009

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frequent
eque t ad for World
W de d e picts children of
641-1199
company's clients.

ach of the four partners who
make up World Wide
Financial Services, Inc. car-
ries a doubloon-sized coin
with the inscription:
"Whatever It Takes."
The brass piece not only
serves as a reminder of the
firm's humble beginnings —
it took three months to close
the first loan (the client was
a best friend) — but also as
a symbol of how risk and
perseverance serve as their
own reward.
"We struggled in the
beginning, no question,"
said Howard Babcock, co-
founder and senior vice
president of World Wide,
which is based in
Birmingham and has closed
over $1 billion in mortgages

since opening in late 1990.
"The problem was, like
most start-up companies,
we had no track record. We
finally convinced a friend of
ours to buy his first house
with our mortgage. His wife
was a nervous wreck
because she didn't think we
knew what we were doing."
Like other mortgage com-
panies, World Wide's
growth has benefited from a
steady decline in interest
rates. Over the last four
years, the Federal Reserve,
which controls the nation's
money supply, has driven
down short-term rates by a
total of seven percentage
points.
The interest rate reduc-
tion campaign was designed
to help offset the latest eco-
nomic recession. Lower
interest rates put more
money in the hands of
homeowners with adjust-
able-rate mortgages
(ARMS) in hopes they will
buy more cars, microwaves
and video phones.
Because ARMs fluctuate
with the rise and fall of
interest rates, a lowering
trend translates into consid-
erable savings for mortgage
holders. Homeowners with
fixed-rate mortgages can
also reap savings by refi-
nancing their loans at the
lower rates.
Aaron Sanders, president
of First Equity Financial
Services Inc. in Birming-
ham, said the mortgage
lender has also enjoyed
record growth over the last
two years due to interest
rate reductions.
"Historically rates always
climb when a Democrat

(President Bill Clinton) is in
office, but we haven't seen
that yet due to the sluggish
economy," said Mr. Sanders.
"We have seen growth not
only in refinancing, but new
purchases and non-conform-
ing mortgages. If all is in
order, we can get a loan out
in four to five weeks."
Non-conforming mort-
gages help present and
future homeowners with
bad credit, especially those
who saddled themselves
with high debt obligation
during the boom years of
the '80s.
By refinancing all debts
— from credit card charges
to home payments to elec-
tric bills — into one month-
ly payment, non-conforming
mortgages allow cash-
strapped buyers to take
advantage of lower interest
rates while raising deduc-
tions on their income tax
statements.
Meanwhile,
because
lower rates mean lower
monthly payments, tradi-
tional buyers find they can
afford larger homes. First-
time buyers also find homes
are often less expensive per
month than an apartment.
Both buying trends fuel
extra business for real
estate and mortgage offices
as well as appliance stores,
home improvement centers
and landscaping companies.
The mortgage industry has
also been an engine of
growth for the job market.
"When I was looking for a
job earlier this year I saw a
lot of ads for mortgage loan
officers. So I took a two-
week training class and
came in here at the end of

