Connecticut Mortgage Rates and Financing Update September 23, 2011

This Week's Financial News

Unfortunately, HUD does not want to extend the temporary loan limits.  Period.  HUD has conference calls with the heads of mortgage banking divisions every day, and they have been saying since early last summer, they do not want to extent the expanded loan limits.

So it's no big surprise to anyone following the mortgage industry that The Federal Reserve Thursday morning released its 2010 Home Mortgage Disclosure Act database, concluding that a drop in the maximum GSE loan limit to $625,500 (from $729,750) will have only a "small" impact on mortgage origination going forward. 

Researchers at the Fed estimate that in 2010 just 1.3% of Fannie Mae/Freddie Mac mortgages --including both refinancing and purchase money deals – fall into the GSE ‘jumbo' category of being between $625,500 and $729,750.  However, an additional 2.1% of 2010 home-purchase loans and 2.4% of refi's would "potentially" be affected by a decline in Federal Housing Administration loan limits.

Yes, it will cost you more for a loan some time next year.  The Federal Housing Finance Agency as early as Thursday could release its annual report on guarantee fees charged to mortgage bankers by Fannie Mae and Freddie Mac, according to industry officials.  FHFA acting director Ed DeMarco this week said Fannie and Freddie will hike their guarantee fees some time next year to better reflect “that which would be anticipated in a private competitive market.”  DeMarco also hinted that the two may soon stop providing volume discounts to their largest seller/servicers. In 2009 the 10 largest sellers to Fannie and Freddie accounted for about 74% of their total residential purchases in the secondary market.  

Please keep in mind that lenders simply cannot move mortgage rates lower at the same pace as a rapid rally in Benchmark Treasuries.  Although you might hear that mortgage rates are tied to Treasuries, THEY ARE NOT, and you'll be perennially frustrated if you expect them to be.

The current market is in a state of flux at the moment and mortgage rates moving up and down around ALL TIME LOWS.  Best Execution 30yr Fixed rates were mostly near 3.875% this week with some lenders at 4.0%, they're closer to 3.75% with quite a few lenders still at 3.875%.  FHA/VA deals are in a bit of a predicament that's keeping them blocked off below 3.75% (there's no secondary market for rates any lower than that right now!).  For similar reasons, 15 year fixed conventional loans may be stuck at 3.25%.  The secondary market factors driving adjustable rate loans are in a massive state of flux, but one that is mixed between positive and negative.  5 year ARMS remain near 3.125%, but with variations from lender to lender.  Bottom line, adjustable rates aren't participating in this rally to the same extent as fixed rates.

Guidance these days is all about the risk of "pipeline control" price changes among lenders.  Regardless of what happens in markets, be they Treasuries or the Secondary Mortgage Market, lenders can still only write loans to the extent allowed by their capacity.  Lenders also must be careful not to lower rates so quickly that borrowers who recently locked actually break those lock commitments in order to move down to a lower rate.  Even if borrowers do this at the same lender, it costs lenders a lot of money.  So whether it's to avoid that sort of cannibalization or to avoid capacity issues, there's an elevated risk right now of lenders RAISING rates without warning, even if the underlying market movements would not suggest it.

Today's Mortgage Rates

30 year fixed - 3.75% + .0 points for rate
20 year fixed - 3.625 % + 0  points for rate
15 year fixed - 3.125% + 0 points for rate
10 year fixed - 3.125 %  0 points for rate
5/1 ARM - 2.50% - 0 points for rate
7/1 ARM - 2.75%  + 0 points for rate

FHA/VA
30 year fixed - 3.75% +  0 points for rate
5/1 ARM - 2.875 +  0 points for rate
7/1 ARM - 3.250 + 0 point for rate

Jumbo - up to 2,000,000
30 year fixed - 4.625 points  for rate
15 year fixed - 4.125% + 0   points for rate
5/1 ARM - 3.250 % + 0 points for rate
7/1 ARM - 3.875% + 0 points for rate

10/1 ARM -  4.250 % with + 0 points for rate

Jennifer Buchanan,  Certified Mortgage Planning Specialist at MetLife Loans is a seasoned veteran of the Mortgage, Banking and Broker Industry and specializes in mortgage loans throughout Fairfield County, Connecticut.
   Her attention to detail is unsurpassed, and her understanding of the marketplace makes it easy to find the right loan to fit her clients specific needs .  Jennifer's local processing and closing team are also known for their exemplary service.
   Understanding that the vast majority of mortgage brokers never discuss the long or short term  financial needs or goals with their clients, she set herself apart from the rest by obtaining the coveted CMPS  designation. (Certified Mortgage Planning Specialist)
    She is a member of the National Association of Responsible Loan Officers, and her commitment to ethics, understanding of the marketplace, and business acumen have earned her the respect of her peers and clients alike.

Jennifer Buchanan
Metlife Loans
203-341-6949

Jennifer Buchanan- Your certified expert
 on mortgages offering Free Unbiased
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