Soylent Green (loved the movie!), does this also affect jumbo rates? Or is the credit component so high that it is not sensitive to where MBS is trading?

A rising tide lifts all boats. Jumbo and conforming rates have soared.

Soylent Green - a metaphor for our times. global peril, systemic collapse, corrupt government aligned with powerful business interest, the lower economic class feeding on itself while the unaccountable rich skim off the last remaining cream… visionary and apropos.

My 02c

Soylent Green Is People…mmmmm.  yummy delicious people….

And who can claim they know what Cheerios are really made of…

I guess the question is this: Jumbos became so much more expensive than conforming, does the spread over conforming change daily or is it static? Are jumbo rates much more variable than conforming with regards to FICO and LTV?

True portfolio jumbo rates move as much as traditional FNMA/FHLMC/HUD loans. They may have different mechanisms in arriving at their price and rate, but they move in lock step with traded MBS loans.

Tuesday is Soylent Green Day.

My 02c

Soylent Green Is People.

So looks like I need to start aiming for 25% down (instead of 20%) to avoid any additional fees/rate increases for my future condo purchase.

Still hoping to be able to get into an SFR though!

25inIrvine - 09 June 2009 10:50 AM

So looks like I need to start aiming for 25% down (instead of 20%) to avoid any additional fees/rate increases for my future condo purchase.

Still hoping to be able to get into an SFR though!

Look outside of Irvine and that 20% down on a condo is probably more like 25-30% down on an SFR.  With a real yard.

And a garage.

And a driveway.  Just in case you want to park on it and use your garage as a work shop.  Or pool hall.  Or weightroom.  Or pack rat storage facility.

Oh, and don’t worry about the HOA you won’t have to deal with one unless you really want to find one.

Mortgage rates hit 7-month high

Yes, but the 10yr T hit 4.01% and has since fallen. We had one rate sheet today, plus two improvements since. This isn’t a trend, but rates will begin to moderate back a bit from the current highs.

My .02c

Soylent Green Is People

I have a relative working in the mortgage business and she was getting a lot of business through refi’s, but now the rates are up, her business is drying up.  She is worried about high interest rates as it will affect her business.  Are mortgage workers worried?

Soylent Green Is People - 11 June 2009 02:28 PM

Yes, but the 10yr T hit 4.01% and has since fallen. We had one rate sheet today, plus two improvements since. This isn’t a trend, but rates will begin to moderate back a bit from the current highs.

My .02c

Soylent Green Is People

This will probably continue into the fed meeting as no one is gonna wanna be short treasuries until after they hear what the Fed may or may not say on June 24th.  I think we blow through the 4% mark on the 10-year in July and 6%+ mortgages will be here to stay for a bit.  The only thing that will reverse that is when equities start selling off because people begin to realize that the second half recovery is nowhere to be found.

Serious buyer (or knife-catcher, if you like) with cash and loan preapproval in hand speaking:

Back in April, we were preapproved for a jumbo loan with 5.875 APR, 0 point. I checked with our loan officer today and as per her, if we wanted to get the same loan today, our APR would be 6.75 with 0 point. We didn’t want to get more than 1 mil loan back then to stay within our means and wanted to put down the rest in cash, and hence, the maximum we were willing to pay for a house we liked two weeks ago was ~$1.35 mil. Based on today’s rate, to have the same monthly payment, we should limit our loan to no more than $900k, and with the same amount of down payment, our maximum offer for the same house today will be less than $1.25 mil. In other words, a property that “valued” $1.35 mil 2 weeks ago values at around $1.25 mil today.

I doubt we are alone and if the rates stays here or (more likely) keep climbing up, we should either see some quick falls in prices, or an even slower high-end market. Only time will tell, but we are already looking for our rental.

Mazy, You seem to be able to do math.  You’re ahead of the game.  With property taxes, HOA, M-R assessment, we really all renters. 
Only $6846 per month plus opportunity cost, maintenance cost, M-R (if any), HOA, etc. to own.
What can you rent alot for $5000 per month?
Sadly to say, most people will quickly buy before interest rates go up again.  The sellers are quick to raise prices when interest rates drop and slow to adjust the prices down when the interest rate increases.  They think their house is a steal at the high price, and the sad reality of the typical buyer and REA “representing” the buyer think they better buy before interest rate or price goes up.

Mazy - 11 June 2009 08:22 PM

Serious buyer (or knife-catcher, if you like) with cash and loan preapproval in hand speaking:

Back in April, we were preapproved for a jumbo loan with 5.875 APR, 0 point. I checked with our loan officer today and as per her, if we wanted to get the same loan today, our APR would be 6.75 with 0 point. We didn’t want to get more than 1 mil loan back then to stay within our means and wanted to put down the rest in cash, and hence, the maximum we were willing to pay for a house we liked two weeks ago was ~$1.35 mil. Based on today’s rate, to have the same monthly payment, we should limit our loan to no more than $900k, and with the same amount of down payment, our maximum offer for the same house today will be less than $1.25 mil. In other words, a property that “valued” $1.35 mil 2 weeks ago values at around $1.25 mil today.

I doubt we are alone and if the rates stays here or (more likely) keep climbing up, we should either see some quick falls in prices, or an even slower high-end market. Only time will tell, but we are already looking for our rental.

The unfortunate part is that you are not alone, this market makes no sense other than there are limited organic sellers who have equity with the majority of homes being short sales and these sellers think they can get top dollar for their properties.  They will come to realize that they felt a lot of money on the table when they look back a year from now.  Oh well, their loss.  I think renting for 6-12 months and letting things settle down might be the way to go.

Mish always seems to have a cogent analysis of the current situation.

Mortgage Market Remains Solidly Frozen

A question for the mortgage brokers and lenders on here: Is it really true—as stated in the article—that appraisals are now taking 15-25 days to come back because of the new home valuation rules?  And the applicant has to pay for the appraisal upfront and is out the $500 if it comes in low?

Jumpcut - 5 days or so for appraisals. Yes, if the value is low on a conventional we run an Automated Value Model (AVM) to see if this is really far off, and if so a second appraisal can be ordered. Once a lender gets a bad taste in their mouth from a low value appraisal, getting turned around is akin to a miraculous event. It happens, but so do faith healings every so often.

Google HVCC or look at the comments on ML Implode by lenders running into this buzzsaw.

USC Trojan - One rate sheet at 8:00 and a reprice for the better by 10:00. Let’s hope I am right on the rate direction. This makes 6 improving ratesheets in 48 hours.

Conforming -0- point was at 6.0%, today at 5.75
Jumbo Conforming -0- point was at 6.625, today at 6.00%

All assuming 45 day rate locks, 20% down, FICO’s above 740 and SFD purchases. I’d list all of the disclosures, mouse print, and weasel out clauses but who has the time…Equal Housing Lender.

My .02c

Soylent Green Is People

Soylent Green Is People - 12 June 2009 10:22 AM

This makes 6 improving ratesheets in 48 hours.

Conforming -0- point was at 6.0%, today at 5.75

Pricing and action in the RE market is reflective of the recent 4.75% rates.

The shift to 6% and now trickle down to 5.75% hasn’t registered.

give it time…

and give the 6% time.  The Fed meeting is going to be interesting and California is looking like a juggernaut coming for end of July.

You may be wishing for 6% in two months…

An update….

Three rate sheets today, all for the better.

5.500 standard conforming, -0- points. 5.250 for 1.0 point (on average, of course)

Essentially 1/2 percent lower since the thread started.

Remember: Tuesday is Soylent Green Day!

SGIP.

Soylent Green Is People - 16 June 2009 12:42 PM

An update….

Three rate sheets today, all for the better.

5.500 standard conforming, -0- points. 5.250 for 1.0 point (on average, of course)

Essentially 1/2 percent lower since the thread started.

Remember: Tuesday is Soylent Green Day!

SGIP.

As I predicted, treasuries would pull back going into the Fed meeting.  As much, picked up 10 TBT July puts.

Nice day for the mortgage market ... NOT!

awgee - 18 June 2009 01:03 PM

Nice day for the mortgage market ... NOT!

The 10-year yield was up 19 basis points today, over a 5% gain, even though equities had a nothing day.  I think rates are just looking for any excuse to run up.  I’ll bet Soylent had a couple printouts for the worse today…

Old Ben is going to have to whip out his $1T checkbook.

LWP - Yes, we had three for the worse, then two for the better - net .125 worse in rate. Not a catastrophe.

10Y T rates are an indicator of the direction in rates. FNMA Mortgage Backed Securities are what drive rates. You can have a 3.9 10yT with a rally in opposite direction of the FNMA 4.0MBS depending on circumstance.

With a new 104b supply line choking up the pipes, Our Chinese Overlords (OCO) will ask again for an uppper 3.0% rate of return. As I adjust my tinfoil chapeau, once OCO are taken care of with this debt offering we’ll see an average 5.25% or lower rate come back.

My .02

Soylent Green Is People.

Soylent Green Is People - 19 June 2009 10:34 AM

LWP - Yes, we had three for the worse, then two for the better - net .125 worse in rate. Not a catastrophe.

10Y T rates are an indicator of the direction in rates. FNMA Mortgage Backed Securities are what drive rates. You can have a 3.9 10yT with a rally in opposite direction of the FNMA 4.0MBS depending on circumstance.

With a new 104b supply line choking up the pipes, Our Chinese Overlords (OCO) will ask again for an uppper 3.0% rate of return. As I adjust my tinfoil chapeau, once OCO are taken care of with this debt offering we’ll see an average 5.25% or lower rate come back.

My .02

Soylent Green Is People.

Sorry, I think the Fed is buying instead of the Chicoms these days.

To update.

5.375 conforming as of 7/8/09 -0- points

5.0% at 1.0 point

4.875 7/8/09 at 1.5 points

Assumes 720 higher FICO, SFD purchase.

The “green shoots” recovery has browned out so cash is flowing into mortgages and treasuries driving rates back down.

My .02c

Soylent Green is People.

Just resurrecting an old thread.

11/16/09 Pretty much everything is in the 4’s now from Jumbo Conforming, standard conforming, FHA insured loans - not at zero points, but still much lower than before.

I saw a 15 year fixed for 2.0 points today at 3.875%. I’m sure some Internet site will be showing 3.5% in the next 48 - 72 hours.

You got me why this is going on. With relatively huge gains in stocks, mortgage bonds should be reversing. This may be a temporary parking of cash to try and capture some yield. It’s not the Fed that’s for sure.

The all time low was in March, when many people captured a 30 fixed for 4.25-4.125%. I’d have to say that was the absolute bottom. We’re not likely to see anything lower than that. Cost of money is .50 to 1.0, cost of servicing is 1.0 or so. The balance of profit in a 4.0% rate is 1.5% to 2.0%. That’s a very narrow margin. Because of this I don’t really see things drifting below 4.0% without significant costs involved.

My .02c

Soylent Green Is People