Federal Reserve Board Redrafts Rule on Jumbo Escrow Accounts is a post from: Jumbo Loans

The Federal Reserve Board (FRB) submitted a plan to redraft the escrow account requirements for higher-priced, first lien “jumbo” mortgage loans. It uses a provision of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and would increase the annual percentage rate (APR) threshold used to establish whether a mortgage lender is required to establish an escrow account for property taxes and insurance for first-lien jumbo mortgage loans. In the United States, a jumbo mortgage is a mortgage loan in an amount above conventional conforming loan limits.

In July 2008, the Board issued final rules requiring creditors to establish escrow accounts for first-lien loans if a loan’s APR is 1.5 percentage points or more above the applicable prime offer rate. Under the Dodd-Frank Act, which amended the Truth-in-Lending Act (TILA), the escrow requirement will apply for jumbo loans only if the loan’s APR is 2.5 percentage points or more above the applicable prime offer rate. The APR threshold for non-jumbo loans stayed the same.

The Dodd-Frank Act incorporates into TILA the Board’s regulatory requirement for escrow accounts and revises the APR threshold, but the act also includes other provisions, including new disclosure requirements. This change would implement only the act’s modification to the APR threshold. Other provisions of the act concerning escrow accounts will be fulfilled in a separate rulemaking.

The proposed change would not affect the APR threshold used to determine whether a jumbo loan is subject to the other consumer protections that the Board adopted for higher-priced loans in 2008. Those protections include requirements for determining consumers’ repayment abilities and restrictions on pre-payment penalties.

The Board is soliciting comment on the proposed rule, including the appropriate implementation date, for 30 days after publication in the Federal Register.

Trying to make sense of it all? Contact someone who is the expert in jumbo loans.

Jumbo Loans Making Comeback and Boosting High-End Sales is a post from: Jumbo Loans

The newest drop in rates doesn’t seem to be doing much for conventional loans, but for jumbo loans it is a different matter. Those at higher income levels might not be as worried about jobs as others. Currently it seems that the best hope for the housing market is to keep these rates lower. Now big banks are joining the charge to give out jumbo loans. Mortgage brokers are still more qualified to handle your jumbo loan.

How low are the current jumbo rates? Last year at this time, a 30-year fixed jumbo rate was averaging more than 6 percent. It’s now at an all time low average of 5.07 percent. And the re-finance rate for a 30 year jumbo is currently at 5.30 percent. A fifteen year jumbo is at the historic low average of 4.68 percent.

The market has shifted from one extreme to the other; now lenders require high-net borrowers to put down as much as 40 or 50 percent for a down payment compared to only 20 percent a few years ago. Borrowers must also have good income, strong credit scores of 700 or better and sufficient financial reserves. In addition these creditworthy buyers are waiting longer to close their jumbo mortgages while banks intensely study financial documents and complete their due diligence. Low and no down payment and adjustable rate schemes are no more.

The biggest mortgage players —  agencies Freddie Mac and Fannie Mae — increased conforming loan limits from $417,000 to $729,750, cutting more than $312,000 off the jumbo market that once was the optimal area of gain for brokers. The sky may be lightening however, credit is relaxing , interest rates are low again, new creative loan plans are making an appearance and repressed demand for high-end housing is anxious to enter the market. Unlike conventional mortgages, jumbo loans by definition exceed the conforming loan limit of $417,000 set by Fannie Mae and Freddie Mac. Jumbo rates are loosely tied to long term treasuries but they are traditionally higher because of the risk involved for the banks in making a larger loan. Strict or not, the banks are lending and refinancing jumbo loans at much higher volumes than last year.

If you are looking to get into a jumbo rate mortgage or are interested in refinancing your current jumbo loan please contact the jumbo loan expert.

More Jumbo Lenders Willing To Lend is a post from: Jumbo Loans

If you live in places like New York and are looking for a jumbo loan, chances are that you may have noticed that some lenders are coming back into the market.

Not all lenders, mind you  – but at least a few are starting to loan people with great credit and healthy down payments jumbo loans up to as high as $10 million.

In the tri-state area, jumbo loans are loans that exceed $729,750 – and with the real estate market not losing ground as rapidly (and actually rising in some areas) as it has in recent years – more people are ready to settle into a larger loan amount.

Courtesy HSH / WSJ

What kind of interest rates can you expect when thinking about jumbo loan financing? According to the Wall Street Journal, jumbo loans are getting more competitive with regards to price.

Gibraltar Private Bank & Trust, based in Coral Gables, Fla., has been particularly competitive, offering jumbo loans as large as $10 million. “It’s a clear differentiator that we are aggressively lending to the affluent in New York,” says Chris Damian, Gibraltar’s chief lending officer. “We’re doubling our lending staff in the New York market by year-end, which is an indication that this market is booming.”

Interest rates on jumbos typically are higher than rates on smaller mortgages, but the gap has narrowed in the past year. Overall, jumbo mortgages offered in the New York area on a 30-year jumbo loan have declined to 5.59% as of last week from an average of 6.35% a year ago and to 5.13% from 5.91% on a 15-year jumbo loan, according to HSH.

But several small local banks are offering jumbos under 5%. For example, on Monday, Valley National Bank was advertising 30-year jumbos at 4.75% and 15-year jumbos at 4.5%, according to the bank’s website.

The cost of adjustable-rate jumbo mortgages is also falling. On Monday, Apple Bank lowered its rate on a five-year adjustable rate mortgage to 4.25% from 4.5%. A few banks, including J.P. Morgan Chase, are offering rates as low as 3.75% for borrowers making a down payment of at least 20%.

So if you happen to be in the market for jumbo loan financing – look for lower interest rates and more jumbo loan lenders willing to loan you money.

Jumbo Loan Rates At Lowest Levels Since 2003 is a post from: Jumbo Loans

Interest rates on jumbo loans have touched lows not seen since 2003 recently – which is good news for homeowners who currently have a jumbo loan or are looking at buying a home and financing it with a jumbo loan.

Courtesy WSJ

According to the WSJ:

Just a year ago, the average rate on a 30-year jumbo mortgage—a loan of more than $729,750 not backed by government-sponsored agencies Fannie Mae or Freddie Mac—was 6.86%, according to Greg McBride, a senior financial analyst at Bankrate.com. Now it is 5.48%—a rate that rivals those available during the height of the credit bonanza.

“In just the past couple of months, jumbo loans have really started to be competitively priced,” says Keith Gumbinger of HSH Associates, a publisher of consumer-loan information.

The recent low rates on jumbo loans has caused an uptick in refinancing activity – with some jumbo lenders reporting that jumbo refinancing up as much as 50% vs. what it was last year.

Jumbo Loan Refinancing Could Mean Big Savings

Because of the large loan amounts, if you can save even a single percent on your interest rate for a jumbo loan, it will add up to a large dollar savings each month. For example, a homeowner with a 30-year fixed-rate $800,000 mortgage at 6.86% pays $5,247 a month. If he were to refinance at 5%, his monthly payments would be reduced by $952.

Jumbo Lenders: Still Available

Finding the right jumbo lender can be tricky – many mortgage brokers are no longer in business. There are still mortgage banks who can help you get your jumbo loan refinanced, and many of the larger banks are offering jumbo loan programs. Be sure to shop around for a jumbo loan, each lender will have different guidelines and different interest rates – and by shopping for your jumbo loan, you will save thousands and get the best possible deal.

New Jumbo Loan Programs Available in California is a post from: Jumbo Loans

As mortgage rates are at all-time lows, at least one lender is getting into the jumbo loans game by announcing their new jumbo and super jumbo loan programs.

According to MarketWatch, Bank of Internet announced that they have recruited a seasoned jumbo loan financing executive named Jerry Konzen who was previously with jumbo loan giant Thornburg Mortgage. Mr. Konzen is leading the jumbo loan program at B of I and when he was asked how B of I plans to compete in the jumbo loan market, he replied:

“We offer a concierge level of service to brokers, correspondents and their customers. We provide customers with highly customized portfolio financing solutions that exceed their expectations.”

The target market in California for the new jumbo loan and super jumbo loan programs are the affluent, educated and sophisticated borrower who knows how mortgage markets work and demands a high level of service.

There are flexible guidelines with this new jumbo loan program and since B of I is retaining these jumbo and super jumbo loans in their portfolio, they can allow more flexibility than if they packaged them up and sold them. For example, B of I will accept pledged assets, will vest in entities, and freedom to make common sense underwriting decisions.

With a return of at least one larger lender to the California jumbo loan market, it isn’t long before other lenders jump in and start offering jumbo loan financing — and it is a perfect time for consumers while rates are low.

Jumbo Mortgage Rates: Lowest Since 1971? is a post from: Jumbo Loans

While jumbo mortgage rates don’t *exactly* follow other mortgage rates, there is a correlation between conforming mortgage rates and jumbo mortgage rates.

And according to the AP, conforming mortgage rates are the lowest they have been on record since they started keeping track in 1971.

Even though mortgage rates are low, it hasn’t triggered a home buying frenzy because many people are still “stuck” in their home – where they owe more than their home is currently worth. And still more people are battling unemployment or have went through a short sale or foreclosure and as a result have bad credit.

But if you find yourself in a situation where you have a job, have good credit and are looking to buy or refinance a home…

There has never been a better time.

Well, not since 1971 at least.

Chicago Realtors Pushing For Higher Jumbo Loan Limits is a post from: Jumbo Loans

When you go to finance a home, whether or not you qualify for a FHA jumbo loan is going to depend on what Fannie Mae and Freddie Mac say about the conforming loan limits in your area.

And in the Chicago area (as well as many other parts of the country), the conforming loan limit is $417,000. For FHA loans, it’s $410,000. But in plenty of other parts of the country, home buyers can finance up to $729,750 because they are considered “high-cost” areas.

And the Chicago and Illinois Realtors’ associations are trying to muster support to convince the agencies to raise the loan limit for high-cost portions of the Chicago area.

According to the Chicago Tribune:

“This is at the crux of the problem with the marketplace here,” said David Hanna, a former president of the Chicago Association of Realtors and a member of a local task force trying to change the loan formula for the Chicago area. “The loan limit here is the same as it is in Dayton or Columbus or Peoria or Pekin. That’s crazy. It’s fundamentally unfair. Everything else here mirrors higher-cost areas in other parts of the country.”

According to a brochure the group has developed to lobby the GSEs and congressional leaders, one remedy for the problem would be to base the lending limit for a Chicago-area county on 125 percent of the highest median home price of a given municipality within that county. Using 2006-2008 home values as an example, that would mean the lending limit would be $868,500 for Cook County, based on a median home price of $694,800 in Wilmette. Other county loan limits, using prices from the same time, would range from $417,625 in Kendall County to $1.125 million in Lake County.

If an increase of the jumbo loan limits for the Chicago area are approved through the Realtor Association efforts, many people think that the move would allow many homeowners who are currently up against the conforming loan limit to refinance into a more affordable loan program while rates are low.

Jumbo Loans Get Cheaper, But It Is Still Hard To Qualify is a post from: Jumbo Loans

If you can qualify, there hasn’t been a time when jumbo loans were any cheaper.  Take a look at what interest rates on jumbo loans have done over the last few years according to HSH associates:

According to a story that recently ran in the Wall Street Journal:

“More lenders are starting to ‘get it’ and are coming to the table with more aggressive pricing,” says Alan Rosenbaum, chief executive of New York City brokerage Guardhill Financial Corp. He says that both prices and product offerings have improved from one year ago.

Citigroup Inc. began advertising a 5.63% rate on 30-year fixed-rate jumbo loans, and five-year adjustable jumbos as low as 4.87% for banking customers in New York and California. “There are a lot of really good buyers who are under-served today,” says Sanjiv Das, chief executive of CitiMortgage.

More banks are coming back because credit standards are very stringent, which makes the default risk low on these loans—especially if prices are nearing a bottom. Citigroup underwrote last month’s securitization deal for Redwood Trust, and those 222 loans had a weighted average credit score of 768. Many loans had loan-to-value ratios of 60% or lower. “Even if there was a sharp drop in housing, this was a pretty safe bet,” says Mr. Das.

Jumbo Loans: What It Takes To Qualify

Generally speaking, when it comes to getting a jumbo loan, banks are requiring at least 20% down for jumbos up to $1 million, at least 30% down up to $2 million, and often more for loans north of that. In addition to a healthy down payment, if you are interested in getting a jumbo loan, you are going to need to have a great credit score — at least a 720 and sometimes even higher.

It also may depend on what part of the country you live in — some banks have different jumbo loan lending guidelines depending on the area of the country you live in.

Jumbo Loan Interest Rates: Shop Around is a post from: Jumbo Loans

When it comes to interest rates for jumbo loans, only one thing is certain – if you shop around, you will find a wide variety of differences in the interest rates and guidelines for each jumbo loan lender.

Many of the larger banks are loaning jumbo mortgage loans to their customers and each of the lenders has their own guidelines of what they will and won’t allow. Some lenders will allow you to borrow money up to $4 million (sometimes called “super jumbo loans”) and some will only go up to $900,000 or so.

But with the FHA jumbo loan limit being $729,000 many people are finding that this a great jumbo loan program that is insured by FHA and doesn’t require a high down payment.

Basic FHA Jumbo Loan Highlights Include:

• Up to $729,000 financed. (based on the county loan limits published by HUD)
• 660 FICO score required.
• 3.5% down payment.
• 30 year fixed rates around 5%

Whether you are in the market for a jumbo loan, a FHA jumbo loan or a “super jumbo loan” only one thing is certain – shop around. Each lender has different loan programs, interest rates and fees and the more that you talk to different loan officers, the better your chances of ending up with the right jumbo loan for your needs.

FHA Jumbo Mortgage Loans is a post from: Jumbo Loans

FHA Jumbo Loans: What You Need To Know

As the economy turns around, more people are feeling better about buying homes – and depending on which area of the country you live, you may run into the FHA jumbo loan program as a great option for you.

The FHA jumbo loan program is popular in places like California because home values are generally higher and the FHA regular loan limits haven’t caught up — so the FHA jumbo loan program was created.

FHA Jumbo Loans are available through at least December 2010 as part of the extended economic stimulus package – and they may or may not be available after that. The higher loan limits for FHA jumbo loans allow financing for homes that are in areas that are considered to be a “high cost area”.

Are you interested in learning more about the FHA jumbo loan program and seeing if it is right for you? Be sure to ask someone who has experience with the FHA jumbo loan program and can help get your questions answered. Us? We can close your FHA jumbo loan in 10 days if needed.