Dennis' Mortgage Blog

Don’t forget to set your clock ahead tomorrow (Saturday 3-8-08) before you go to bed or you will be late for church on Sunday (or your tee time!)—or is it early? I never remember J

Please keep in mind layered risk pricing for all loan products for credit score and loan to value mixes. Call for quotes.

C R A Z Y ! ! That is the market this week as economic news and loan limits and lack of buyers for mortgages pushed and pulled the rates on the wildest week I can remember in my two decades in the industry. Suffice it to say we are in a volatile market and everyone needs to proceed with prudence and caution on all transactions. Communicate often, make sure lock dates can and will be hit, quickly provide any information requested.

After jumping 0.375% yesterday in one day, that is in rate not in fee; almost one-half of one percent in one day; today we gained most of that back as the market zoomed the other way. That balanced us out for Thursday but the market still had big losses on Tuesday and Wednesday.

***LOAN LIMIT UPDATE***

We have the new limits for Fannie Mae and Freddie Mac and FHA. What we do not have is pricing. Investors have not yet determined what they will pay for the new loan amounts in the secondary market so we do not know what price add-ons will occur. I am skeptical of anyone who says they can price one of these loans right now and so should you be.

What we do know about the new Fannie limits:

• Only purchase or rate/term refinances (termed “limited cash out” to pay costs)
• Cannot be used to consolidate 1^st and 2^nd any existing 2nds must subordinate
• Only single family residences (including condos and PUDs)
• 2^nd homes and investment properties are eligible
• Max LTV is 90% for purchases and 75% for refinances (up to 95% CLTV if subordinating existing 2^nd)
• Loan limit extension ends 12/31/08
• FICO of 700 or great for purchases over 80%, all over loans must have FICO of 660 or greater
• Six months seasoning on all refinances

This is just a summary of the nine page letter we received from Fannie, we assume Freddie Mac has identical guidelines.

Will this help our industry? Yes as there are many borrowers who will benefit from the lower rates available, even with the add-ons. Will you benefit? Call me and find out.

NOTE PRICING BELOW IS BASED ON 15% DOWN FOR JUMBO LOANS AND 10% DOWN FOR CONFORMING, FULL DOC, AND FICOS OF 720 AND ABOVE:

30 year conventional at 1 point 6.125%

30 year jumbo at 1 point 7.375%

Do not forget to set you clocks back.

Do not forget to contact me for up to date and accurate mortgage and market information.

Do not forget to pass my name and number along to someone this weekend!

I comment on the industry frequently on Mortgage Blog so check in, this week I commented on the pressure being put on the Senate by the National Home Builders Association to give a $10,000 tax credit to buyers of new construction homes.

I would appreciate it if you could pass my name on to someone who needs mortgage information this week, or send me their name and contact information and I am happy to see how I can be of service. Thank you!

Please feel free to forward this email to your co-workers and clients--or send them to my Mortgage Blog where it is posted weekly.

Have a great weekend,

Dennis

Friday, March 07, 2008