MONEY MASTER

 A sudden surge in Google searches for  “help with mortgage”  has spooked investors, with online chatter drawing comparisons to the 2008 housing crisis. But economists caution: while homeowner stress is rising, a repeat of the GFC is not on the cards — at least not yet.  Key Highlights Search Surge:  Google Trends shows queries for  “help with mortgage”  hitting their highest level since  2009 . Not 2008 Redux:  The viral claim that searches surpassed the 2008 crisis is misleading. The true prior peak was in 2009. Context Matters:  Internet adoption was lower in 2009; today’s spike doesn’t directly translate into mass defaults. Mortgage Stress Signals Delinquencies Rising:  Serious delinquencies (90+ days past due) climbed by  30,000 YoY in July  (Intercontinental Exchange). FHA Loans Under Pressure:  FHA-backed mortgages (popular among first-time & lower-income buyers) accounted for  52% of serious delinquen...

Hong Kong has eased its mortgage rules, allowing homebuyers to pay a lower down payment in a bid to address the city’s ongoing property market slump. The loan-to-value (LTV) ratio for all residential properties has been set at 70% , reducing the required down payment for homes valued above HK$35 million . Previously, these homes had an LTV ratio of 60%. Additionally, the LTV ratio for company-held properties has also been raised to 70% from 60%. These changes took effect immediately, with the Hong Kong Monetary Authority (HKMA) stating there is room for adjustments due to the softening property market in recent months. Furthermore, Hong Kong’s New Capital Investment Entrant Scheme has been expanded to allow investment in homes valued at HK$50 million or more, with a cap of HK$10 million on the amount counted towards total capital investment. Following the announcement, the Hang Seng Property Index rose as much as 3.9% , outperforming the main Hang Seng Index . However, the prop...

South Korea's household borrowing surged in August by the largest amount in over three years, driven primarily by a record increase in mortgage demand , according to data released by the central bank on Wednesday. Household borrowing from banks reached 1,130 trillion won (US$840.52 billion or RM3.66 trillion) at the end of August, marking an increase of 9.3 trillion won over the month. This is the largest monthly rise since July 2021. Mortgage loans alone rose by 8.2 trillion won , the biggest jump since such data became available in 2004, according to the Bank of Korea (BOK). At a meeting with local banks on Tuesday, South Korea's financial watchdog expressed concerns over the rapid increase in household debt , warning that such financial imbalances could potentially evolve into systemic risks. The head of the watchdog urged banks to strengthen their risk management practices following recent tightening of lending rules by authorities earlier this month. "In September,...

China is considering a major move to allow refinancing of up to $5.4 trillion in mortgages, aiming to lower borrowing costs for millions of families and stimulate consumption. The plan would permit homeowners to renegotiate mortgage terms with their current lenders before January or switch lenders for the first time since the global financial crisis. Key Takeaways: Refinancing Initiative to Support Economic Growth : The proposed refinancing plan aims to lower mortgage costs, which could ease financial burdens for homeowners and boost consumption. This measure comes amid mounting pressure on Chinese authorities to counter a housing-led economic slowdown, following a series of disappointing earnings from consumer companies and reduced growth forecasts from major financial institutions like UBS Group AG. Impact on Chinese Banks : Lower mortgage rates could significantly affect the profitability of Chinese banks, particularly state-run institutions. The sector is already grappling with rec...

The average rate on the popular US 30-year fixed-rate mortgage increased slightly to 6.78% for the week ending July 25, according to mortgage finance agency Freddie Mac. This rate is about half a percentage point below its peak earlier this year, as potential homebuyers continue to exhibit hesitancy. Key Highlights: Mortgage Rate Movement: The 30-year fixed-rate mortgage rose to 6.78%, up from 6.77% the previous week. The rate was 6.81% during the same period last year. Market Hesitancy: Chief Economist Sam Khater noted that despite the lower rates, buyers remain cautious, as indicated by declining new and existing home sales data. Existing home sales fell 5.4% in June, marking the fourth consecutive monthly drop and the slowest rate since December. Homeowner Behavior: Many homeowners are reluctant to sell properties purchased with lower mortgage rates, as buying a new home would likely result in a higher rate. Housing inventory has increased to its highest level in nearly four years, ...

Bank Negara Malaysia (BNM) has raised the overnight policy rate (OPR) by 25 basis points to 3.25%. This is the first hike in the OPR since May 2011. The decision was made at the Monetary Policy Committee (MPC). BNM also released a statement, saying "The floor and ceiling rates of the corridor for the OPR are correspondingly raised to 3.00 percent and 3.50 percent respectively." OVERNIGHT POLICY RATE? WHAT IS THAT? Have you ever wonder what is this OPR that these people are talking? I used to have big difficulty understanding the business and financial vocabulary. In short, OPR is the interest rate at which a bank lends to another bank, which is set by the BNM.  This rate has an effect on the country's employment, economic growth and inflation. Generally, it is an indicator of the health of a country's overall economy and banking system. WHY IS THERE A HIKE? There is a lot of reason for the increase in the OPR but there are a...