tag:blogger.com,1999:blog-57330910963374337742012-02-16T22:27:10.220-05:00A running commentary on the news and trends in mortgage and housing industries from the perspective of a 15 year veteran of the mortgage industry. This blog is inspired by my frustration over the years that much of the reporting on mortgages and housing is misinformed and that much of the counsel to consumers is overly simplistic. I am not an industry defender or apologist. THE MORTGAGE TRUTH IS SPOKEN HERE.Max Ethearthttp://www.blogger.com/profile/05188165626975537210noreply@blogger.comBlogger21100tag:blogger.com,1999:blog-5733091096337433774.post-86719864103625154712008-04-18T12:29:00.002-04:002008-04-18T12:36:35.185-04:00<blockquote cite="http://online.wsj.com/article/SB120845444598023419-email.html"></blockquote><br /><p class="citation"><cite cite="http://online.wsj.com/article/SB120845444598023419-email.html"><a href="http://online.wsj.com/article/SB120845444598023419-email.html">Freddie to Finance Jumbo Loans - WSJ.com</a></cite>.</p><br /><p>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. </p><br /><p><cite cite="http://www.washingtonpost.com/wp-dyn/content/article/2008/04/17/AR2008041703772.html"><a href="http://www.washingtonpost.com/wp-dyn/content/article/2008/04/17/AR2008041703772.html">Freddie Mac, Banks Reach Deals on Jumbo Mortgages - washingtonpost.com</a></cite>.</p><br /><p>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 1/8^th 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.</p><div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/5733091096337433774-8671986410362515471?l=loanvoice.blogspot.com' alt='' /></div>Max Ethearthttp://www.blogger.com/profile/05188165626975537210noreply@blogger.com0tag:blogger.com,1999:blog-5733091096337433774.post-4714196917939858282008-04-11T11:28:00.000-04:002008-04-11T12:49:46.640-04:00If you expected the increase in conforming loan limits that was part of the "Economic Stimulus Act of 2008" to save the housing market, then you, like me, are still waiting. And you are still hoping.<br /><br />You are hoping and waiting because, while these new maximum loan sizes have already been enacted, the pricing and the underwriting guidelines for these new "conforming jumbo" loans do not have what it will take to bring us out of the housing slump. And they certainly don't have what it will take to save some jobs in the mortgage industry. This second goal may not be an important public policy concern, and it may not generate a lot of support from the American public after the vilification of the mortgage industry in the media over the last year. Nevertheless, it is a mission that is dear and near to my heart (and to my financial and mental health).<br /><br />The next posts will desribe the specific underwriting guidelines for these "conforming jumbo" loans that make a paper tiger out of these loan limit increases. I am reserving final judgement for a while to see if the pricing and guidelines will evolve and improve before asking <a href="http://www.mediacollege.com/video/format/compare/betamax-vhs.html">Betamax</a>, <a href="http://en.wikipedia.org/wiki/New_Coke">New Coke</a> and <a href="http://www.engadget.com/2007/12/17/vista-named-1-biggest-tech-disappointment-of-2007-by-pc-worl/">Windows Vista </a>to make room in Disappointment Hall of Fame.<br /><br />I am also looking for a better term than the <a href="http://en.wikipedia.org/wiki/Oxymoronic">oxymoronic</a> "conforming jumbo" for these loans and invite any suggestions.<div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/5733091096337433774-471419691793985828?l=loanvoice.blogspot.com' alt='' /></div>Max Ethearthttp://www.blogger.com/profile/05188165626975537210noreply@blogger.com3