From the desk of Steve Arsenault...
Rates have remained relatively stead this past week, given the high volatility within both the equity, mortgage and general credit markets. The government control of the GSEs (Freddie Mac and Fannie Mae) has resulted in a return to 'responsible' lending. Freddie Mac is leading the way by prohibiting the sale of any Freddie Mac mortgage with debt-to-income ratios in excess of 45% slated for deliver in 2009. Fannie Mae is expected to follow-suite shortly. Restrictions are also now being imposed on Government loan programs, such as FHA and VA. Maximum debt-to-income ratios are being restricted to 50% going forward. Despite the obvious restrictions on certain higher-risk borrowers, these actions should increase the likelihood of future repayment for new GSE loans. This may also increase confidence in investment in the credit markets for mortgage loans, possibly resulting in a new infusion of investment in the Mortgage Backed Securities (MBS) markets.
Also, new loan limits have been established for 2009. The Conventional Conforming loan amount will remain at $417K. The new high cost Conventional Jumbo loan limit has been set at $625K (previously $729,750). The maximum FHA loan limit will also be $625K.
Below are rates available over the weekend:
30 Year Fixed Rate (<$417K): 5.875% with 1 point
30 Year Fixed Rate (<$625K): 6% with 1 point
FHA/VA: 6% with 1 point
If you have any questions or would like more information, please feel free to contact me at:(703) 359-6592.
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