Happy Valentines Day

Where is the love this Valentine's Day? Today Obama released his plan to 'phase out' Fannie Mae and Freddie Mac. Below I will summarize some points for you, but you can read the article here: http://money.cnn.com/2011/02/11/news/companies/fannie_mae_freddie_mac_white_house_proposal/index.htm

By 2018, Fannie and Freddie are planned to be essentially gone. It’s hard to imagine what 'private equity' they expect to handle the trillion dollar market. Not to say change is not necessary, but I hope the extra money they are looking for will enter into our market. Will it be the Chinese or the Saudi's that close the gap on our market? Is that what kind of 'private' equity they are talking about? Will America be America anymore? I heard a foreign buyer is looking at buying the NYSE...seriously?

Back to Fannie Mae, there are some sentences in the above article that caused me to pause. Phrases like: "recommends requiring Fannie Mae and Freddie Mac to price their loan guarantees to the same standards as private banks". So...does that mean to charge higher yields? Private bank portfolio loans usually come at a cost. Hmmmmm.... With regulatory changes coming this April 1, the cost of loans is set to increase anyway (this is my opinion) with the increased cost to lenders. It will pass off to the borrowers.

Other phrases bothered me like: "Increasing down payment requirements in order to shrink Fannie and Freddie's portfolio". In other words, to phase them as market players over the next (couple) of years. That will really help dig us out of the recession.

"Increase premiums on FHA loans by .25%". Fact: they already have done that this year! The cost to borrowers for these low income loans has already increased about $20/mo on a $100,000 loan. That is a lot of money for many people. How again will this help support homeownership and encourage families to buy a home? Increase the cost? Will it be affordable?

Lots of questions left unanswered this week, I know. Sorry! I am just going to keep plugging along, implementing and improving my systems to WOW our clients and referral partners, and close as many transactions as I can! Today. One thing is for sure, there will be a mortgage market, there has to be! For the lucky son of a gun that gets creative and provides this 'private equity' Obama is talking about...more power to him. I'll be ready.

Enjoy the beautiful weekend!
BHBK (Big Hug Big Kiss) this Valentine's Day.

Jennifer


RATES as of February 11, 2011 (UP FOR THE WEEK)
The following assumptions apply:
20% Down Payment (Conforming) / 25% Down Payment Jumbo (Lower down payments available – call for details)
1% Origination Fee
Escrows Required (if no escrow, higher fees may apply)
Purchase Transactions, Primary Residence (Refinances have different rates)
30 day closing
Credit Score 740 +
Debt to income ratio <=40%
Full Documentation of Income/Assets

Conforming ($200,000* - $417,000)
Jumbo ($417,001- $1,000,000*)
30 year (fixed) 5.125% APR 5.260%
30 year ( fixed ) 5.875% APR 5.997%
15 year (fixed) 4.375% APR 4.602%
15 year ( fixed ) 5.250% APR 5.425%
5/1 ARM 3.875% APR 3.625%
7/1 ARM 4.375% APR 3.935%
5/1 ARM 4.000% APR 3.654%
7/1 ARM 4.250% APR 3.857%
10/1 ARM 5.250% APR 4.652%
FHA/VA call for quote (max loan $270,000)




We do originate loans below $200,000. These amounts are chosen to show the most favorable rates.
For other product options or for loan amounts less than $200,000 or above $900,000 please call for quote.
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