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Do You Have a Union Bank of California mortgage loan that is an ARM (and resetting sometime soon)

My loan is a jumbo UBOC owned loan that they kept in portfolio. It is an ARM and 4 years old. With loans in this program, when it adjusts there is a fixed rate conversion option (and no other loans I know of have these but let me know if you find one) so that the new rate upon conversion is the Fannie Mae 60 day commitment rate plus .00375. If you have a loan in this UBOC program you may be able to lock in a long term fixed rate of about 3.875% with no costs or fees! Read your loan docs and the addendums and riders and you may be in luck!!!! I feel like I won the lottery!!!!!! Incredible deal! Any thoughts or comments?
  • February 21 2012 - US
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Answers (4)

Professor Baron / CORRECTION / It is not 60-day + .00375 / It's 60-day + 1% / Which is still fabulous! / Also / The borrower has the option to convert anytime from the first to the 5th adjustment period / Then the loan is Amortized for the remaining FORTY YEARS / Currently on Purchase Transactions they are waiving their Administration fee / Rates are GREAT! / Happy funding / Rudi
  • March 01 2012
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I understood the first time I read your post there are no fees to fix your rate.
Since you finished your post with "any thoughts or comments?"  I posted a  comment. Yes, it is a great rate if you plan to hold the property long term. My point is if someone doesn't plan to own for more than 7 or 8 years then they wouldn't have to wait 1 year for the conversion window and they could change to a 7/1 now at 1 point lower, that's all.    
  • February 22 2012
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Hey Clay, to lock in the rate I have to pay a fee of, per my mortgage note, "$0.00" dollars and "give them written notice" that I want to do the conversion. That is it! Nothing else!!!!!!

Unfortunately I can't do the conversion until my ARM reaches its first change date, so hopefully rates will stay low for 12 more months...

I just posted this so that any of Union Bank of California jumbo loan borrowers knew of the provision. Because many could already be eligible to fix their loans....and they should!

Plenty of equity in the property, this was a refi, purchased 10 years ago.

Thanks!
  • February 22 2012
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That is good if you plan to hold the loan for more than 7 or 8 years. If you chose to use the conversion option and lock the rate for the balance of the loan does the lender revisit value, run an AVM? If they do, will you still show equity or upside down since you bought 4 years ago? If you have 30% equity or more and do not plan to stay longer than 7-8 years you may find a new 7/1 to be 1 point lower than the conversion offer, aprx 3/4 point lower if no closing cost depending on loan size and credit score.     
  • February 22 2012
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