Blog of the Mortgage

These changes will be happening on June 1^st, 2008.

While I was out running all over Northern California last week and you were all so graciously sending your loans in to me and my, team Freddie Mac (FHLMC) sent out a quiet announcement regarding delivery fees.

The grid and price adjustments (hits, bumps, pre pay charges etc) are going into effect on June 1^st. So you know, FNMA already has Loan Level Price Adjusters for FICO’s under 680 AND LTV’s greater than 70%. These adjustments are hard to miss since your pricing for these borrowers has been noticeably fu-bar. See any Conforming Rate sheet today.

Here’s how the Freddie (FHLMC) announcement breaks down:

1. 0.30bps add to fee for LTV’s over 80% AND fico under 740.

2. Hits of up to 2.75% for FICO <620, LTV > 70%

3. One big plus: we’ll likely see an improvement for less than 60% LTV and FICO >700

Also: the Home Possible (HP)100 is going Buh-Bye (without FICO 700) and the HP 97% will be limited to 92% (-5%) in soft, adverse, declining, distressed markets.

INDICATOR SCORE/LOAN-TO-VALUE

Effective for Settlements on or after June 1, 2008

These fees will NOT apply to 15 year mortgages, Home Possible or FHA/VA mortgages.

How does this affect you?? – Check your lender list, but if they require you to use LP as their AUS these are Freddie lenders (ie. The Horses & Buggy Co, a certain PF etc.).

Of course all of this leads to one final decision for FICO’s under 740 or 680 or 700 or whatever with LTV’s over 70% - FHA. We’re getting rave reviews in this arena and being the 4^th largest originator in the nation does certainly help J.

FHA is a great option for you: if you haven’t yet signed up with HUD have your broker/manager call me so that we can get your office moving in the right direction.

Thank you for your business this month! I look forward to continuing to aid you in your success.