Blog of the Mortgage

Changes coming to Rate sheets in Feb/March

While we all try to count our loan chickens before they've funded and hope that there's enough value left in the properties our borrower's have in order to actually close FNMA announced a another change to LLPA's (pricing).

We know that FHLMC is requiring a maximum DTI of 45% now (or shortly depending on your lender) and now it's going to get more expensive for many of those last conventional deals we're hoping to improve our customers cash flow on.

In any case while the most of us were trying to enjoy our Christmas vacation and relax after the frenetic year that was 2008
FNMA sent out announcement 08-38 on 12-29. Print it out here.
These changes will go into effect on April 1st, 2009 so likely you'll start seeing the new adjustments on all our rate sheets in early February (to cover ourselves for 60 days locks) or shortly thereafter.

I really looks like the newly created FHFA is trying to get the FNMA ship right sized besides just throwing billions at it. In the middle of a potential refinance boom they're guiding our business to be over 740 FICO's. Everything else can go into the HUD bucket.

Notably missing are the fee improvements for FICO's over 720 with LTV's 85% (remember that .25% extra you got back?)
Since the grid is somewhat compacted and since many of you have likely been looking at the unadjusted Government pricing for so long this one took a second.
For FICO's under 700 (680-699) it just got roughly .500% more expensive in fee (remember when these were the benchmark borrower group?).
For FICO's from 660-679 the fee to gain a conventional conforming loan just increased by .750%! Wow! How about a 2.500% fee just to run a 75.01-80% LTV loan?
You found a borrower with actual equity? They want to pull some cash out for the sake of I don't know? paying the bills, saving for college, getting 70% at the Sears? the Cost for borrower's with under 720 scores on Cash-out loans is now .500% more expensive.
Condo's have been the ire of almost every single lender, especially those that were over exposed in Florida and other over built parts of the states. FNMA is now tossing in an extra .750% increase for Condo's over 75.01% LTV.