The CU Journal Daily

Register now

Long-Term Mortgage Rates Slip

McLEAN, Va.-Long-term mortgage rates declined last week to the lowest level in six weeks, as energy prices near record highs made investors nervous about slowing economic growth, Freddie Mac said.

The average for the benchmark 30-year loan slipped to 5.71%, from 5.77% last week, while the average for the 15-year, fixed-rate mortgage dipped to 5.32% from 5.35%. ARM rates were mixed, with the average for the one-year ARM dropping to 4.48%, from 4.56%, but the average for the five-year ARM holding steady at 5.30%.

"Market jitters about high energy costs and the spill over into other sectors of the economy have led to a decline in bond yields, which typically means lower mortgage rates," said Frank Nothaft, chief economist at Freddie Mac. "And speculation that the Federal Reserve may soon take a break in raising short-term rates reduces upward pressure on long- and short-term interest rates. As if all that wasn't enough, the devastation caused by Hurricane Katrina and the echo effects on future energy prices in the U.S. may mean that mortgages rates will fall even further in the coming days ahead."

Ent Offering Cash, iPod To Join

COLORADO SPRINGS-Ent, the state's largest credit union, which earlier dropped "federal credit union" from its name, is offering cash to new members in its latest recruitment campaign. The $2-billion credit union said members who convince others to join will qualify for a grand prize drawing for a new iPod Mini or digital camera and will qualify the new member for a cash award. Members who open a new checking account will have their $5 membership fee waived and will have their new savings account funded with a $35 balance.

Sallie Mae Drops Bid For PHEAA

RESTON, Va.-Student loan giant Sallie Mae said it has terminated its $1-billion offer to acquire the Pennsylvania Higher Education Assistance Association, but is still interested in some kind of partnership with the state-owned student lender.

A company official told Gov. Ed Rendell in April the $1 billion offer would expire Aug. 31, unless it was extended. Sallie Mae said an expected change in federal law in student loans should make the student loan agency worth less. The PHEAA, which is controlled by the state legislature, rejected Sallie Mae's offer out of hand, saying the company's for-profit structure was contradictory to the goals of the state-run agency. PHEAA is the largest originator of student loans in Pennsylvania, with Sallie Mae third, behind PNC Bank.

Ohio CU Offering Free Gasoline

NEWARK, Ohio-At least one credit union is turning to a timely promotional lure: free gasoline. With gas prices topping $3 a gallon in many areas, Fiberglas CU here has teamed with BP/Duke & Duchess stations to offer $100 in free gas to any member who finances their vehicle through the credit union.

The credit union already partners with the stores in offering no-surcharge ATMs at 57 BP/ Duke and Duchess Shops in the state of Ohio.

Robber, Kidnapper Gets 147 Yrs.

COLUMBUS, Ohio-A man convicted in six kidnap-style robberies at credit unions, banks and check cashers-including the biggest credit union heist ever-was sentenced to 147 years and eight months in a federal prison.

Gary Watkins, 41, was convicted in May, of staging a string of robberies with his brother, Eric Watkins, that included the kidnap-style robbery at Western Credit Union in July 2003, in which they stole $643,000, believed to be the most ever robbed from a credit union.

The gang was also believed to be responsible for the May 2003 robbery of $145,000 from Whitehall Credit Union, and several other heists, with a total take of more than $1 million.

H&R Block Plans To Open Bank

KANSAS CITY-Tax preparers H&R Block, which has evolved into a diversified financial services provider, said last week it expects to win a bank charter under Utah's Industrial Loan Company regulations later this year.

The company, which runs a large mortgage banking and financial consulting operation, is the latest, along with Wal-Mart, Sallie Mae, and other non-traditional financial service providers, to seek a bank charter under Utah's laws.


For reprint and licensing requests for this article, click here.