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Thank you in advance for any input that you can give me on this issue.
I have a client who just called me this morning relative to a cash out refinance which will fall into the jumbo loan category. I understand from speaking with the few wholesale reps that I can reach in wholesale that the clock is ticking on the tempory agency jumbo loans. Many indicate that any loan must be locked almost immediately and closed by month end or no later than Dec. 5th. Was also told that Wells will not be doing any jumbo during December.
I am trying to be realistic here and do not want to give my client any false hope or information. What are you hearing? And if any, are there any lenders that you are aware of that are considering working on the new guidelines or limits that take effect Jan 1st.
My client is self employed so I guess what I am saying or asking here is what can we do if we potentially plan for a loan that might not close before the end of this month.
Again, thanks in advance for your input or lead to any wholesaler that could help.
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wayne....what are the particulars of the loan
Realistically I think we will have the new loan limits in the next 7-10 days and we will know what the new loan limits are before the end of the month. After the new limits come out I would bet the lenders will address how they will handle loans in process.
I have heard variations of when the last day of lock and settlement. I think it is lender by lender and the last loan has to be closed by 12/15/08. Have no idea if they are going to extend, renew, come up with new. All I see is FHA Jumbo is priced to the pont that it is past 7.00. That is a phase action out for sure.
My loan is a cash out refinance for $ 460k under 70% LTV.
Understand that I do not have a confirmed appraisal, nor does the client want credit run until I can give him some particulars. He is a past client, and scores should be in the low 700's.
Andrew. From a conversation with Wells and one other source, new guidelines will probably come out until mid-December and taking effect Jan 1. Wells was pretty blatant about just not doing Jumbo during Dec. since their normal jumbo rates are very undesirable to say the least.
Thanks again for your help. It is appreciated.
If he has to move now, put him in a Portfolio ARM and then refi him into a 30 year fixed, no cost, next year when the dust settles. Otherwise, I'm starting to tell clients is about over for 2008 on AJ, and we won't be able to do the new conforming limits - even if know for sure they're going into effect - until at least 1/1/2009.
certainly wouldn't count on extended AJ limits - who's representing this on behalf of CA clients in Congress right now? They've got bigger fish to fry, like bailing out the banks....
The new Conforming loan limits will be out before then and Wells usually adopts the new limits as soon as they are public.
Will he take a 7/1?
Is it in the area that currently has a $729k limit? If so I would think that you are okay as long as it fits the rest of the guides. My impression is that a lot of these areas will eventually go to $625k right?
Andrew, the new program does not take effect until January 1; they can announce the new limits all they want but per law they don't start until the first of the year.
Wayne, If you can fund by December 1, I have someone that will take it with fairly decent rates. Let me know.
PF is funding through December 15th, locked by November 15th.
Wanye, look up ING Mortgage at www.ingloans.com. They like jumbos and seem to fit your client. Your scenario is pricing 5.375% paying 0.5 points on 5/1 ARM. Call me if you need further help.
Wow! You guys are great....thanks for the input.
Wants only fixed.....yes property is in high cost area in Orange County CA.
My concern about Dec. 1 is the documentation---he is self employed and you know how that goess...most lenders will want 2 years 1040's and a YTD P & L...many also wanting a 4506T...I have no issues with that, it is just getting all doc in time...it rests with the client to get everything in.
Thanks again everyone!
Oh my goooooodness.
Lenders like Wells Have the ability to portfolio loans until the change takes effect. They have been doing it for years. Limits come out and they will allow you to originate based on the new limits. By no means does it mean they will do it going forward but I would be betting they will.
Lenders like Wells have the ability to write loans at 0% interest too, but they don't!
"By no means does it mean they will do it going forward but I would be betting they will."How is this an answer to his question?To refresh ... he asked:"And if any, are there any lenders that you are aware of that are considering working on the new guidelines or limits that take effect Jan 1st. My client is self employed"How is your supposition helpful? You say Wells will be portfolio lending, fixed rate, Jumbo conforming before the 1st of January ... I'm in! Call me with a figure you wish to wager.You still refuse to just say ... "oops, I made a mistake".
I know that I have already said this, but wanted to reiterate my thanks for all of your input.
You have been very helpful by your responces.
I was sharing my experience and letting Wayne and everyone else know that we will likely have more clarity in the next week or two.
Maybe even Friday....
Thanks Andrew. Good info.
Wayne, hope the information helped. It is not always like this in the blogs. Lenders here are dealing with new formats. Take care.
Wayne, Flagstar may not have the best rates but they are funding them thru 12/31 according to the memo I got the other day.
Ray, you do know ING has different rate sheets for different states right?
Geoff, my bad! Didn't notice if he mentioned his state.
Wayne, those rates were quoted for Florida.
Thanks for the heads up Geoff.
This is a reprint of the email I sent to Realtors on Octiber 30th on this topic. The information is still accurate.
Please make sure your clients are aware of these changes in availability of financing. Until the new programs are in place, it will be very difficult to find financing above the $417k conforming limit if conforming jumbos and FHA jumbos are not already locked.Changes to FHA and Fannie Mae/Freddie Mac (GSE) mortgage limits are tentative. Additional loan limit details from the agencies is anticipated in mid-November 2008. GSEs AND FHA WILL ANNOUNCE NEW 2009 MAXIMUM LOAN LIMITS THE WEEK OF NOVEMBER 10, 2008-Housing & Economic Recovery Act (HERA) guarantees that the nationwide GSE limit cannot decline below the current nationwide limit of $417,000-FHA base loan limit will not decrease below $271,050 or 65% of the GSE nationwide limit2009 maximum loan limit for FHA, FNMA and FHLMC in high cost areas is anticipated to be set at $625,500, or 150% of the GSE nationwide limit allowance (down from 2008's allowance of $729,750 at 175% of the nationwide limits)-Calculation factor for high cost areas (areas above $271,050 floor for FHA and $417,000 floor for the GSEs) will be 115% (down from the 125% of the nationwide limits) of the area median price for both GSEs and FHA
Wayne, sent you an email. Hope it helps. ..... Happy funding!
Wayne, if you are suggesting ING, then you may have a 1 year prepay and ofcourse a potential refi in a year or so. Why not a first and a second with Wells? They are still doing them.
If you want to go with Wells Fargo it has to be locked by Nov 15th. Chase is also currently doing conforming jumbo loans.
I am suggesting Wells for a first mortgage at $417,000 and then a second with them for the remainder. That way you don't have to worry about a deadline and you will get a much better rate on that first. If you are going to give them an ARM with a prepay then you are going to be refinancing them down the road so give them the fixed rate first and refinance them if they need it down the road. Atleast it's fixed!
Thanks again everyone for all of your help. Really impressed with everyone who jumped in to help me on this one. It's sincerely appreciated.
MetLife (First Horizon) - taking locks through November 28 and funding by December 15th. Good luck!
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