Talked to 2 mortgage brokers today

[SD Realtor]

Perhaps HLS can confirm this.

I spoke to two different mortgage brokers today and they both did indeed confirm that the 30 year fixed jumbos are getting pounded. What was puzzling to me is that they both quoted that they have a much easier time moving 5 year jumbos then 30 year fixed jumbos! Wowsers…

This is just speculation on my part but I wonder if some of the reasoning is that the 5 years convert to the Libor based index while the 30 year fixed are always based on US treasury indices. Just useless speculation on my part.

At any rate if this credit crunch continues at the pace it is at…. things are going to get quite interesting.

BTW the lenders also told me that even the 30 year conformings are about 1/4 higher then where they should be given the current 10 year treasury level.

[flyer]

SD Realtor/HLS

Probably a remedial question, but from the homebuyer’s perspective, which index and loan type is more likely to be best for someone who only plans to hold a home loan for only a year or two, then pay it off?

[flyer]

SD Realtor/HLS

Probably a remedial question, but from the homebuyer’s perspective, which index and loan type is more likely to be best for someone who only plans to hold a home loan for only a year or two, then pay it off?

[Anonymous]

5 year programs have several advantages from the lender’s point of view – not the least of which is that some lenders will probably keep some or all of that production in their own portfolio. If they do go to package it for sale, as you point out, the loans are designed to adjust so they lessen interest rate risk.

Just my hunch.

With regard to the difference to the 10 year treasury – the treasury is just a benchmark and the spreads change when their is a flight to quality (as we are now experiencing). Most conforming loans end up in mortgage backed securities and their price is their price but over time they do tend to move more in tandem with treasuries.

The private mortgage backed securities are what is causing some of the distress in the market – as lenders are experiencing difficulty (or at least great pain) in selling/packaging those loans their ability to make future loans changes. That appears to be what is happening in the current scenario.

[Anonymous]

5 year programs have several advantages from the lender’s point of view – not the least of which is that some lenders will probably keep some or all of that production in their own portfolio. If they do go to package it for sale, as you point out, the loans are designed to adjust so they lessen interest rate risk.

Just my hunch.

With regard to the difference to the 10 year treasury – the treasury is just a benchmark and the spreads change when their is a flight to quality (as we are now experiencing). Most conforming loans end up in mortgage backed securities and their price is their price but over time they do tend to move more in tandem with treasuries.

The private mortgage backed securities are what is causing some of the distress in the market – as lenders are experiencing difficulty (or at least great pain) in selling/packaging those loans their ability to make future loans changes. That appears to be what is happening in the current scenario.

[SD Realtor]

flyer –

Not remedial at all… If you are planning to pay off your loan in such a short time then you would want to simply put any programs you are considering on a spreadsheet and see which program bears out the least cost for you. In such a short time, the origination costs of the loan will be a large factor. Do you see what I mean? Since you will pay it off before it resets or converts, it doesn’t really matter.

SD Realtor

[SD Realtor]

flyer –

Not remedial at all… If you are planning to pay off your loan in such a short time then you would want to simply put any programs you are considering on a spreadsheet and see which program bears out the least cost for you. In such a short time, the origination costs of the loan will be a large factor. Do you see what I mean? Since you will pay it off before it resets or converts, it doesn’t really matter.

SD Realtor

[no_such_reality]

One year or two makes a huge difference on origination fees versus rate effects particularly on $400K loan or so. Also, keep in mind, the market is neurotic at the moment. 1 yr ARM has the same payments (fees rolled in) as 3 year ARM which has about a $10 difference on 5 year ARM. Scarily, a 5 year IO is actually has a lower rate and fees according to bankrate.com than a 1yr ARM.

Of course, this is fluid time and those are going to whipsaw around over the next couple weeks if not disappear overnight.

Shop carefully.

[no_such_reality]

One year or two makes a huge difference on origination fees versus rate effects particularly on $400K loan or so. Also, keep in mind, the market is neurotic at the moment. 1 yr ARM has the same payments (fees rolled in) as 3 year ARM which has about a $10 difference on 5 year ARM. Scarily, a 5 year IO is actually has a lower rate and fees according to bankrate.com than a 1yr ARM.

Of course, this is fluid time and those are going to whipsaw around over the next couple weeks if not disappear overnight.

Shop carefully.

[SD Realtor]

Agreed with nsr completely. Another thing to point out flyer… If indeed you are in such a situation, being cash rich, or perhaps soon to be cash rich, you will be in the catbirds seat with respect to making a purchase. The longer you can hold out, the better.

SD Realtor

[SD Realtor]

Agreed with nsr completely. Another thing to point out flyer… If indeed you are in such a situation, being cash rich, or perhaps soon to be cash rich, you will be in the catbirds seat with respect to making a purchase. The longer you can hold out, the better.

SD Realtor

[fromnj]

My colleague told me the other day that he has a license to sell mortgage and he can give me 30 year fixed mortgage at PAR.
We have not discussed about his fees, but does it mean that he can give me the same rate at borker’s shown in yahoo real estate or something like that?

[fromnj]

My colleague told me the other day that he has a license to sell mortgage and he can give me 30 year fixed mortgage at PAR.
We have not discussed about his fees, but does it mean that he can give me the same rate at borker’s shown in yahoo real estate or something like that?

[HLS]

FROM & SD R,
I’m not ignoring you, just swamped since yesterday.

I’ll answer the OP when I can, next day or so.

Not to bang the gong, but I price ALL my loans for any client at the PAR rate. This is a rate that pays NOT A PENNY to the originator. This is why a fee needs to be charged. It’s the BEST rate for the borrower without a buy-down. Assuming that loan will be kept at least 2 years, it’s what every borrower wants, but doesn’t usually get.

Even major banks have wholesale and retail rates. The PAR rate is the back door wholesale rate. See my separate post about rebates and YSP.

What you see on Yahoo or any other site is just estimates and averages. Just an indication.

Depending on what you qualify for, every lender has different rates and programs with PAR rates.

10 diff lenders could have 10 diff PAR rates for 30 yr fixed. There are specials and loans ARE still being underwritten and funded.

By the way, SD R, You don’t know me and I don’t know you, but I respect YOU… I have thick skin, and am not stressed over the current market conditions. I’ve predicted this for 4-5 years, and am well prepared…I have nothing to lose by telling the truth. It’s how I conduct my life.

However, I will tell you that there are several real idiot morons with conspiracy theories posting on this board that accuse me of having an agenda.

I’ll pick and choose who I reply to, and will call a spade a spade. Everyone’s entitled to their opinion, but I don’t deal well with ignorance and stupidity.

You told me that my type didn’t stick around long, and I know why. I can spend my time better than posting with complete honesty here and being accused of lying.

I really do have better things to do.

[HLS]

FROM & SD R,
I’m not ignoring you, just swamped since yesterday.

I’ll answer the OP when I can, next day or so.

Not to bang the gong, but I price ALL my loans for any client at the PAR rate. This is a rate that pays NOT A PENNY to the originator. This is why a fee needs to be charged. It’s the BEST rate for the borrower without a buy-down. Assuming that loan will be kept at least 2 years, it’s what every borrower wants, but doesn’t usually get.

Even major banks have wholesale and retail rates. The PAR rate is the back door wholesale rate. See my separate post about rebates and YSP.

What you see on Yahoo or any other site is just estimates and averages. Just an indication.

Depending on what you qualify for, every lender has different rates and programs with PAR rates.

10 diff lenders could have 10 diff PAR rates for 30 yr fixed. There are specials and loans ARE still being underwritten and funded.

By the way, SD R, You don’t know me and I don’t know you, but I respect YOU… I have thick skin, and am not stressed over the current market conditions. I’ve predicted this for 4-5 years, and am well prepared…I have nothing to lose by telling the truth. It’s how I conduct my life.

However, I will tell you that there are several real idiot morons with conspiracy theories posting on this board that accuse me of having an agenda.

I’ll pick and choose who I reply to, and will call a spade a spade. Everyone’s entitled to their opinion, but I don’t deal well with ignorance and stupidity.

You told me that my type didn’t stick around long, and I know why. I can spend my time better than posting with complete honesty here and being accused of lying.

I really do have better things to do.

[Author]

Posts