Freddie to Finance Jumbo Loans - WSJ.com.
Breaking news on conforming jumbos offers a glimmer of hope. The agreement has been reached between Freddie Mac and four large lenders (Chase, Citi, WAMU, and Wells Fargo). The Freddie Mac Chairman and CEO predicts a rate drop of .5% to .75% on "conforming jumbos" versus market rate jumbos.
Freddie Mac, Banks Reach Deals on Jumbo Mortgages - washingtonpost.com.
The Washington Post article above is very similar but it has a head scratch inducing statment from Fannie Mae spokesman Brian Faith. Mr. Faith asserts that Fannie is requiring a .39 higher yield on conforming jumbos compared to traditional conforming loans. This is not consistent with any “conforming jumbo” rates that I have seen from anyone. With traditional conforming rates at about 6.25% with no points today, that would mean that the additional yield would translate to 6.65% “conforming jumbo” with no points. Of course, the rate would be rounded up to the nearest 1/8th in rate to 6.75%. So far, so good. The problem is that there is no one publishing a “conforming jumbo” at that rate and price. I would love to understand what factors I and the FNMA spokesman have failded to account for. Hopefully someone can in explain in the comments section what I am missing.
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