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REDUCTIONS BY FED, LOWERING OF PRIME RATE WILL HELP FUEL STOCK MARKET-TYPE RALLY FOR HOME MORTGAGES, BROKER SAYS

 REDUCTIONS BY FED, LOWERING OF PRIME RATE WILL HELP FUEL
 STOCK MARKET-TYPE RALLY FOR HOME MORTGAGES, BROKER SAYS
 BEVERLY HILLS, Calif., April 13 /PRNewswire/ -- A decision by a key New York bank to lower its prime interest rate will have a positive and almost immediate effect on Southern California's residential real estate market and may result in a "stock market-type rally" for home mortgages, a major Los Angeles mortgage broker has predicted.
 "Coupled with the Federal Reserve's decision last week to cut its interest rates, the action by Chemical Bank of New York should bring interest rates back to the 10-year lows they experienced a few months ago," said Gloria Shulman, president of Crestview Financial Group in Beverly Hills.
 According to Shulman, recent upsurges in home mortgage rates were artificial and had no basis in fact. She also said consumers should begin seeing reductions almost immediately.
 She also said these artificial upticks in recent weeks have hurt consumer confidence and, until the recent round of cuts, were threatening to choke off what she described as a "stock market-type rally" among homebuyers and homeowners seeking to refinance existing mortgages.
 "This looks now like there will be a much-needed second leg to the earlier mortgage rally," Shulman said. "There was no rational reason for last month's surge in interest rates and that is being borne out now with these cuts."
 Shulman, whose firm regularly surveys more than 100 lending institutions when placing loans for clients throughout Southern California, also reported that overly sensitive and recession-weary consumers reacted to the rise in interest rates by slowing demand.
 "First to slow was the fixed-rate jumbo loan because it has the highest interest rate of all at any time," she said. "However, the demand for variable refinancings has remained fairly strong despite the interest rate rise of the past month."
 Crestview Financial Group is an independent mortgage brokerage firm headquartered in Beverly Hills. It arranges and places residential mortgage loans with more than 100 lenders throughout Southern California.
 -0- 4/13/92
 /CONTACT: Gloria Shulman of Crestview Financial Group, 310-273-9696; or Keith Karpe or Roger Pondel of Pondel Parsons & Wilkinson, 310-207-9300, for Crestview Financial Group/ CO: Crestview Financial Group ST: California IN: FIN SU:


CH-KJ -- LA023 -- 7896 04/13/92 15:51 EDT
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Publication:PR Newswire
Date:Apr 13, 1992
Words:378
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