My son asked me the other day, “If you try to fail,
and succeed, which one have you done?”
CitiMortgage joined other lenders in publishing their FHA
loan limit increases, which are effective for 2009.
“For FHA Loans that are credit approved pursuant to the American Recovery
and Reinvestment Act of 2009 (ARRA) signed into law on February 17, 2009, the
following high cost area loan limit increases are now in effect: 1-unit
$271,050 $729,750 $1,094,625; 2-unit $347,000 $934,200 $1,401,300; 3-unit
$419,400 $1,129,250 $1,451,925; 4-unit $521,250 $1,403,400 $2,105,100.”
Citi reminded their sellers that any Loan that has a base loan amount exceeding
$417,000, prior to the inclusion of any up-front insurance premium (UFMIP),
must be registered with a different code.
As lenders everywhere await investors to let them know the
pricing and adjustments for high balance conforming loans, it is of interest to
note where pools of these loans are being bought and sold. (Remember that “normal” pools of
conforming loans can contain up to 10% high balance loans, at the same market
price as regular balance conforming loans. This can be a nice source of revenue
for any company charging an extra point or two, and then selling the loans at
the same price in the secondary markets.) Currently high balance
pools are worse in price by roughly 1.5 points from non-high balance pools,
which translates to .375-.50% higher rates. So agents and brokers can expect to
see this price difference going forward initially.
Some investors are changing their jumbo pricing. GMAC,
for example, announced to correspondents that they have “added a -.375
adjustment for all Jumbo Fixed and ARM Products. In addition, we removed
the -.125 adjustment for the 30 Year Jumbo in California.”
(GMAC also refined/changed their TPO policy for loans
“for which the loan origination (taking the loan application) or
processing functions are performed by an entity other than the entity closing
and funding the loan.” GMAC TPO approval is restricted to its delegated
clients who have received TPO approval authority from GMACB Credit Risk, and
are not eligible for funding on table funding transactions. GMAC goes on to
include the check list for TPO loans, which includes an in-file credit report
covering undisclosed debt, deterioration in credit ratings, a verbal VOE,
employer’s phone number, 4506T, AVM, etc.)
God Bless the Associated Press for this story: http://www.google.com/hostednews/ap/article/ALeqM5hEvE8W4EysiYw54gsCxuuDnDpsigD96RAGF80
Yesterday’s stock market rally, which also carried
through overnight, does little to change the picture of our current economy,
but sure made a lot of folks feel better. It was easily the largest gain of the
year, and reasons include a) Citi having a profitable quarter, b) equity prices
reaching a point where they were so under-valued one had to buy them, and c)
the fact that this month contains the second-in-a-row Friday the 13th. The
stock market did little to help our bond market, however, especially with the
3-yr auction. “The market” knows about these auctions well in advance,
but then can either move up or down based on how well they are received. Today
the Treasury will be auctioning off $18 billion of 10-yr notes, so stay
tuned.
Lock desks everywhere saw a little pick up last week, and
this was echoed in the Mortgage Bankers Association’s index of
applications. It rose 11% last week, with the refinancing gauge +13% and the
purchase index +7.1%. Aside from this and folks watching the stock market,
there is little other news out today. With the price pressure due to the
auction, we find the 10-yr up to 3.02% and mortgage prices slightly worse.
My wife and I were sitting at a table at my high school
reunion, and I kept staring at a drunken lady swigging her drink as she
sat alone at a nearby table.
My wife asked, “Do you know her?”
“Yes,” I sighed, “she's my old girlfriend. I understand she
took to drinking right after we split up those many years ago, and I
hear she hasn't been sober since.”
“My God!” says my wife, “Who would think a person could go
on celebrating that long?”
and then the fight started.....
Rob
(For archived commentaries, check www.robchrisman.com,
or to subscribe write to rchrisman@robchrisman.com)
