Dennis' Mortgage Blog

August 3rd, 2007 10:29 AM
As I mentioned in my mid-week caution email, non-conforming products are feeling the brunt of Wall Street not showing a lot of confidence in the mortgage markets--at least the non-FannieMae/FreddieMac mortgage products.  With the jobs numbers this week showing a slight bump in unemployment claims the conforming markets reacted positively, the Jumbo markets continue to slide.  There is lack of liquidity for lenders trying to sell their non-conforming products and this has resulted in higher rates to attract buyers/investors.  What is interesting is we can see who is having difficulty selling product and who is not.  Usually when putting together rates for A+ paper mortgages I look at four to five different lenders to see who has the lower rate or cost at the same rate.  Usually all the lenders are within a quarter to three-eighths of a point in fee of each other.  Today in looking at five major lenders the spread on 30 year fixed rate mortgages is 1% in rate from lowest (6.75%) to highest (7.75%).  Unheard of, but that is today's marketplace.
 
We see softness in rates for standard conforming 30 year fixed rate products (standard being 10% down, good FICO, full doc) and tremendous instability in anything else.  Lock 'em!
 
Note on the graph the divergence in direction for the first time in more than 36 months:
 
30 Yr. Fixed Conforming with 10% or more down: 6.25% at 1.00 point
30 Yr. Fixed Jumbo with 10% or more down: 6.75% at 1.00 point
 
Note these are for 30 day locks, purchase transactions with 10% or more down and strong FICO's. 
 
 
 
Be sure all clients are in constant communication with the lender (me!) before writing your offers to make sure they are not impacted by the now daily changes and dropping of programs.  Caution rues the day and leads to smoother transactions.
 
Have a great weekend.
 
Let me know how I can assist you and your clients.   Be sure to send them to www.DennisCSmith.com for rates, to apply for mortgages, and a lot of great information on loans and mortgages.
 
 
Dennis
 
Dennis C. Smith
Stratis Financial
Direct (562) 472-1118
Mobile (562) 243-6912
Fax (562) 684-4316
Posted by Dennis C. Smith on August 3rd, 2007 10:29 AMPost a Comment (0)
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