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Jumbo loan rates set to improve for conforming loans

 

As with many new product roll outs the transition of Jumbo loans eligible for sale to Fannie Mae and Freddie Mac has been a bit sluggish..

 

There have been thousands of home owners who were eagerly awaiting the economic stimulus package to pass and provide some relief for their current rates on their jumbo loans , unfortunately they have found most lenders have not adjusted the pricing on these loans to be much different then the current jumbo loan market. The spread between conventional loans and jumbo loans has been at or above 2% for the past few months which is crippling this market. Many home owners who may have needed to refinance have waited patiently expecting the new conforming jumbo loans would be their salvation. This has not been the case to date, but their is a strong belief this should be improving. Fannie Mae and Freddie Mac appear to be improving their pricing on these products and most industry experts believe that the pricing should settle in somewhere around fifty basis points higher than current conventional pricing which would be a big boost for this market. Their is growing speculation that the firms will push to keep the temporary loan ceilings in place longer than the allotted time of the stimulus package. This is likely to depend on the health of the credit markets, the stability of the two firms earnings and capital ratios as well as the actual impact this has on the housing market. .

5-23-08 ? LoanNetwork.com

 

 

 

 

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