Mortgage Fears Drive Up Rates on Jumbo Loans

http://finance.yahoo.com/loans/article/103339/Mortgage-Fears-Drive-Up-Rates-on-Jumbo-Loans ^ | 8-7-07 | James R. Hagerty

[vietvet67]

First dose of castor oil.

[steel_resolve]

Um, why am I supposed to feel sorry for a mechanic that can’t afford a 400,000 house exactly? I couldn’t afford a 400,000 mortgage and I KNOW I make more than a mechanic.

[Hydroshock]

The purpose here it to get you to feel sorry for people. I am talking about sound banking and economic policy. And again I say it is very hypocritical of many who for years have decried any form of governmental regulations or intervention to now be screaming for if, like Mr. Cramer is. What is stopping the mortgage companies from offering to convert all the arms to 30 fixed loans at 4% interest. Nothing, but the fact that it does not help them it helps the home owners. They do not care about the homeowners as they claim. They are running scared.

[RegulatorCountry]

But Fannie officials have argued that raising the ceiling on their mortgage purchases could help calm turmoil in the mortgage market and avoid disruptions in the flow of credit, people familiar with the situation said.

Free needles for addicts in Amsterdam helps prevent AIDS, too.

[martin_fierro]

The market disruption came as crushing news for Gary Cecere, a mechanic who lives in Croton-on-Hudson, N.Y. Mr. Cecere said he learned yesterday that Wells Fargo & Co. was no longer willing to complete a planned package of two mortgage loans that would allow him to buy a $410,000 four-bedroom home in Mahopac, N.Y. Hugo Iodice, a branch manager at Manhattan Mortgage Co. who is acting as a loan broker for Mr. Cecere, blamed tighter standards imposed by Wells Fargo on Alt-A loans. A Wells Fargo spokesman had no immediate comment.
"I was getting ready to close [on the home purchase] this week, and they basically pulled the carpet out from under my feet," said Mr. Cecere. For now, he said, his wife, five children, two cats and a dog are cramped into a two-bedroom temporary apartment, awaiting a move. Mr. Iodice said he is trying to find an alternative loan for the family.

Oh, brother. Cue the violins.

[dakine]

Trying, I’m really trying to figure out your angle...I see ‘peat’ and ‘repeat’ on all these threads. You have any original thoughts?

[NeoCaveman]

What is stopping the mortgage companies from offering to convert all the arms to 30 fixed loans at 4% interest.

2 things.

1. They sold all the loans already.
2. Fed Funds rate is 5.25% so if they borrowed at 5.25 to lend at 4 they'd lose their shirts.

[Moonman62]

I am talking about sound banking and economic policy.

You have no clue about either. You want the Federal Reserve to be cruel to people you don't like on your behalf.

[Moonman62]

And he appears to be cutting and pasting his ignorance from other threads.

[dakine]

Exactly...amazing...

[Hydroshock]

Exactly!!! It is not as many claim to easy the pain but it is about unloading the paper. This train wreck is going to happen, nothing can stop it now.

[Hydroshock]

No I do not want them to be cruel to people, but I also do not want to run up the deficit and institute unsound monitary policy to bail out the people or the mortgage industry. Besides inflationis teh greater worry.

[HereInTheHeartland]

“And he appears to be cutting and pasting his ignorance from other threads.”

And the articles themselves are incorrect. Go to a major lender directly (Wells Fargo , BofA) and you won’t pay those higher rates.
The major lenders are raising the rates “through brokers”, not directly

[Moonman62]

During most of the housing boom the deficit was getting smaller. And you really should talk to Congrees about spending and send W a veto pen. You are clueless on monetary policy and fighting inflation, which means you are qualified to be on the FOMC if you get your PhD.

Your proclamation that you don't want to hurt and punish people is unconvincing.

[excalibur1701]

If I knew how, I’d upload a picture of an elephant.

[NeoCaveman]

This train wreck is going to happen, nothing can stop it now.

See "train wreck" is where you and I part ways, at least in degree.

This very real problem is a financial one, not an economic one.

If the 6-8 million most at risk homeowners walk away from their mortgages it will be due to their foolishness in selecting foolish loan options, not due to sudden unemployment. So yes the bond holders get killed, the mortgage brokers get downsized, home builders languish, property values stagnate or in some places sink but everyone still goes to work, goes to the mall, buys their next car etc. There are just more renters out there, that's all.

So ya the 20% of the economy is financials get killed but it is business as usual for the other 80%

[Moonman62]

And the articles themselves are incorrect. Go to a major lender directly (Wells Fargo , BofA) and you won’t pay those higher rates. The major lenders are raising the rates “through brokers”, not directly

That makes sense if they want to eliminate the possibility of fudged paperwork from the brokers. In other words the brokers won't be sending them any more business.

[jennyjenny]

Facts are of little importance here.

[RockinRight]

Don’t be too sure about that. They’re higher overall, but brokers are getting the short end of the stick here.