Ed's Blog

I wanted to give you several observations on how the mortgage market is behaving lately.

1) Mortgage Markets Are Still Unsettled. Despite strong actions from the Fed, mortgage market rates for anything except traditional conforming loans ($417,000 and under for SFR’s) remain sticky on the high side. In Wall Street jargon, “risk is being repriced.” Anything other than traditional conforming loans is priced from 1%-2% higher than it has been historically. Ouch!

2) Underwriting Is Getting Tighter. Sounds like déjà vu all over again as Yogi Berra used to say. Most programs are more restricted than even a week or two ago. Some loans are gone altogether. For example, Fannie Mae and Freddie Mac have discontinued conforming “stated income stated asset” loans effective the end of this month.

3) New Conforming Jumbo Update. We have been getting pricing and guidelines on these over the past 10 days or so. The good news is that the rates on these are a little better than jumbo rates have been. But the underwriting is strict. Full doc only for instance.

4) Deals Are Still Happening! Despite some of the problems outlined above, deals are still happening! Don’t be discouraged by the negative news you read. Underwriting may be more restrictive, but there is still a lot of money to lend out there. And the people who are buying are happy with the deals they’re getting. In some markets that means incredible prices. In other markets that means less competition. But the feeling is the same- they’re happy to be buying!