Market Update

Attached is the latest rate update as of this morning. Notice the rates have
ticked up just a bit from the last time I sent an update. These increases
are not currently justified from market conditions, but rather they are a
symptom of an overly burdened lending environment trying to hold off new
business until they can catch up. Below is a pretty good explanation of the
current situation, as described by Barry Habib from the Mortgage Market
Guide:

"But let's be mindful - and hopefully you are experiencing this as well -
that investors are slammed with the uptick in volume during the past several
weeks. This comes at a time when investors have both shrunk in number and
have depleted head count, in an effort to slash costs. So while the
increase in activity is certainly a good thing, it may be too much too soon
for investors to handle, and the only way to slow down the volume is by an
increase in pricing. And if you're an investor...why not do this, while
being maxed out in capacity anyways? It helps increase profits while making
the workload manageable. As an originator, this can be very frustrating as
you watch the actual markets improve from time to time...but this
improvement is not being reflected in some investors rate sheets. Let's
remember, this is a temporary phenomenon - but during the interim, this is
not a time to cut short your lock-in time frames. In other words, make sure
you have ample or even excess lock-in periods to get your loans closed
during this bottleneck. Be smart and take 60 day locks, rather than trying
to squeeze in a shorter time frame."

LOAN RATE POINTS PYMT ($400,000)
30 yr fixed 5.00% 1.0 $2,138 /mo
5/1 ARM 5.125% 1.0 $2,168 /mo
5/1 Interest Only 5.375% 1.0 $1,791 /mo
30 yr IO 6.00% 2.0 $2,000 /mo

CURRENT RATES – Conforming Plus Loan Amounts $417,001-$546,250
LOAN RATE POINTS PYMT ($500,000)
30 yr fixed 5.625 % 1.0 $2,864 /mo
5/1 ARM 5.50 % 1.5 $2,825 /mo
5/1 Interest Only 5.50% 2.0 $2,291 /mo

CURRENT RATES – Jumbo Loan Amounts > $546,250
LOAN RATE POINTS PYMT ($800,000)
30 yr fixed 7.875 % 2.0 $5,762 /mo
5/1 ARM 6.00% 1.0 $4,772 /mo
5/1 Interest Only 6.125% 1.0 $4,083 /mo
30 yr IO 8.00 % 2.0 $5,333 /mo


Other Related Resources:

Search San Diego Homes
Pre-Qualify Your Mortgage
Real Estate Newsletter
Online Home Value Analysis