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Fed Action Spurs New Mortgage Lending

WASHINGTON-The recent move by the Federal Reserve to boost short-term interest rates and its implications for long-term rates in the near future apparently prompted a new rush to mortgage refinancings and home purchases.

The Mortgage Bankers Association reported a 20% surge in mortgage applications the first week of July to the highest level in two months.

"People may have viewed this as another last opportunity," said David Berson, chief economist for Fannie Mae, of last week's slight decline in long-term rates.

The MBA's refinance index rose 28% from the previous week; while its purchase climbed by 15%.

The group said the average for the 30-year, fixed rate loan dipped below 6% the first week of July, for the first time since the middle of April, to 5.96%; while the average for 15-year, fixed-rate mortgages declined to 5.39%.

Credit Unions Boost Short-Term Loan Rates

WASHINGTON-Credit unions responded quickly to the 25-basis point in the Fed Funds rate by raising their rates on short-term loans.

Data compiled by DataTrac Corp., which tracks rates for 1,000 credit unions, shows the average rates on car loans and short-term adjustable-rate mortgages moved up a few basis points since the Fed's recent action.

But rates on long-term loans, like 15- and 30-year, fixed-rate mortgages declined slightly, as the market had adjusted weeks before based on expectation of the Fed's action, according to observers.

Bill Hampel, chief economist for CUNA, said loan rates, especially those for car and home equity loans, will probably be the most immediately impacted by the Fed's action.

"The home equity loan rate is going to bump up almost immediately with the Prime," said Hampel, noting HELOC rates are closely tied to the Prime rate. ARM rates showed the greatest impact, with credit union averages for one-year ARMs rising five bps to 4.03%; for three/one ARMs by seven bps to 4.74%; and for five/one ARMs by nine bps to 5.18%.

Harland Acquires CheckQuest

ATLANTA-John H. Harland Co. said its Harland Financial Solutions unit has acquired certain assets and exclusive distribution and licensing rights related to Mitek Systems Inc.'s CheckQuest item processing and CaptureQuest electronic document management solutions.

In addition, Harland has licensed the QuickStrokes family of recognition tool kits and the QuickFX Pro form identification tool kit for use with CheckQuest and CaptureQuest. Harland will also resell Mitek's full line of image based fraud protection solutions.

Wescom Automates Recruiting

PASADENA, Calif.-Wescom CU has selected Kenexa's Recruiter Express solution to automate its recruiting processes.

The web-based system will allow the $2.7-billion CU to simplify recruiting for all of its departments and positions and help cut down on hiring costs.

ESL Adopts No Hats, No Hoods

ROCHESTER, N.Y.-ESL Federal Credit Union is incorporating a "No Hats, No Hoods, No Sunglasses" dress code to help bolster security at the CU.

ESL CEO Dave Fiedler was joined by Rochester Police Chief Robert Duffy and Monroe County Sheriff Patrick O'Flynn in announcing the new initiative.

A number of credit unions and banks have adopted similar dress codes to prevent robberies by making it harder for would-be robbers to remain anonymous behind hats, hoods or sunglasses.

"This approach to robbery prevention has been very successful in other cities and states," said Fiedler. "We are confident that this new policy will help serve as a deterrent to possible robberies and will help keep our members and staff safe."

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