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February 17, 1995 - Image 110

Resource type:
Text
Publication:
The Detroit Jewish News, 1995-02-17

Disclaimer: Computer generated plain text may have errors. Read more about this.

"Serving You With 30 Years Experience In All Your Glass And Mirror Needs"
\--„„

6STOVI GLASS SHOWER DOORS

• Custom Mirror Walls
• 13i-Fold Mirror Doors
• Sliding Mimi' Doors
• Plastic Products
• Patio Door Rollers
• I leavy Plate Glass
• Mobile Service
• Glass & Screen Repair
• bble lbps

COMMERCIAL METAL & GLAZING WORK

"Come Visit Our Showroom On The Soulheas1
Corner Of 12 Mile & Greenfield"

4195 W. 12 Mile Rd. • Berkley

810-547-1214

GLASS & MIRROR, INC.

Mon.-Fri. 8-5p.m. Sal. 9-2p.m.

our deadline is ti:ght,
your client just called,
and your computer just ouit.

Don't panic . . . call DSNC.

WE'RE THE
AUTHORIZED
REPAIR
FACILITY
FOR MORE
THAN 20
MANUFACTURERS.

FAST
TURNAROUND
BY A TEAM
OF OVER 20
CERTIFIED
TECHNICIANS.

Those who have built their
reputation on customer
satisfaction now can trust us
to keep them on line. We have
the latest information and tools
to diagnose computer and
peripheral problems quickly
and efficiently.

Call Monday through Friday 9-5.

1-800-544-2086 ext. 300

DATA SYSTEMS NETWORK

CORPOR A T I O N

24401 Halsted Road, Farmington Hills, Michigan

First-tim• customers, bring in this ad to save $5.00
off any repair serpice. Good until 6-30-95.
(One hour serpice charg• required.)

b

HEWLETT

Atil horized
Reseller

Advertising in the Jewish News
gets results. Place your ad today!

B38

Call (810) 354-6060

Business

The Incredible
Shrinking Business

Rising interest rates have dropped the hammer on
the mortgage refinancing boom.

R.J. KING SPECIAL TO THE JEWISH NEWS

C

losings, layoffs and merg-
ers. How else can you de-
scribe the mortgage
refinance business, which
blossomed and then bottomed
from 1991 to 1994?
Many homeowners refinanced
their mortgages to lower rates
from 1991 to 1993 and saved con-
siderably on monthly payments.
But last year, a booming econo-
my and inflation fears led the
Federal Reserve to raise interest
rates six times.
At the end of January, the Fed-
eral Reserve raised rates once
again, which means financing a
new home, car or boat will be-
come even more expensive. In-
terest rates on credit cards will
rise as well.
The average for a 30-year fixed
rate mortgage in metro Detroit
went from 6.90 percent to 9.05
percent last year. And along the
way, there was a fallout in mort-
gage jobs and firms — national
estimates reveal the industry
shrank 35 percent.
"Today, refinancing represents
20 to 25 percent of our business,
where during 1992 and 1993 it
was 75 percent of our business,"
said Lindsay Gross, executive
vice president of Rock Financial
Corp. in Bingham Farms, which
operates 11 offices, seven of which
are in Michigan.
"Believe it or not, there still are
some people who didn't catch the
first refinancing wave," Mr. Gross
said. "Most of our refinancing to-
day is for adjustable-rate mort-
gages (ARMs) which have a 2
percent annual hike and a 6 per-
cent cap (over the life of the
loan)."
For mortgage firms that are
nimble and savvy, the drop in re-
financing hasn't meant tremen-
dous losses. In fact, many firms
are educating consumers in an
effort to create new refinance
business.
While many homeowners have
taken out home-equity loans to
finance everything from cars and
home additions to college educa-
tions and bar mitzvahs, refi-
nancing programs generally offer
lower finance charges.
Firms like Rock Financial will
refinance ARMs that are sched-
uled for an annual increase —
say from 6.5 to 8.5 percent. Mr.
Gross said under such an ARM,
his firm would refinance the loan
to 7.25 percent.

He said the only fees would be digit drop in single-family home
for title insurance, which on a listings in 1994 across metro De-
$150,000 home might total be- troit, though with more residents
tween $300 and $400.
staying put, the remodeling mar-
"A majority of Jewish home- ket has been on a steady up-
owners in metro Detroit have re- swing.
financed their mortgages in
In Troy recently to address the
recent years. While that was a Builders Association of South-
very good business, the market eastern Michigan, David Seiders,
has fallen off considerably," said chief economist of the National
Robert Rubin, presi-
PHOTO BY GLENN TRIEST
dent of Investaid
Corp. in Birming-
ham.
"A number of firms
emerged and disap-
peared (during the re-
finance cycle). They
hired bright, shiny
graduates who had a
contact list of friends
and neighbors and
they helped a lot of
people. But once rates
went up, things went
downhill."
Mr. Rubin, whose
firm specializes in
writing non-conform-
ing mortgages, said
company revenues
will double this year
despite the industry
downturn in refi-
nancing. The firm
currently has offices
in six states and is ex-
panding.
"We write mort-
gages where people Lindsay Gross of Association of Home
can use the money to Rock Financial. Builders, said he was advis-
buy a car, consolidate
ing builders and buyers to be
their credit-card bills
cautious and conservative in
or start a line of credit. If you're 1995.
paying 18 percent interest on
"First off, one of the things
credit cards and take a second we're seeing with builders, both
mortgage with us for 12 percent, nationally and regionally, is a
well, you can see the savings," good number of spec building go-
Mr. Rubin said.
ing on. They're building homes
Interest rates are not expect- without buyers being lined up.
ed to fall anytime soon because It's getting rather alarming," said
the national economy grew 7.6 Mr. Seiders.
percent last year. In addition, due
"There are a number of unsold
to the refinancing wave, many houses, and eventually the
people must stay put for a few market's going to fall off. In a
years to recoup the initial finance sense, I'm warning builders that
charges.
this is not the time to be out there
A reduction in state property building spec homes. For buyers,
taxes last year, along with a new scour the ARM market. There are
real-estate transfer tax of .75 per- still some very nice buys out
cent which went into effect in there.
Michigan on Jan. 1, also will en-
"But be careful of buying (an
courage homeowners to stay ARM) with a big adjustment at
where they are because most the end of the first year. If you
aren't anxious to move up and can lock in for three, five or sev-
take on higher monthly pay- en years, do so. And I'm telling
ments.
builders to get anything (price)
The result has been a double- they can to sell."

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