Jumbo, non-QM, ARM News; Rates (and stocks) collapse in thin market on Covid Variant News

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Jumbo, non-QM, ARM News; Rates (and stocks) collapse in thin market on Covid Variant News

As millions of Americans convince themselves that loading and unloading the dishwasher counts as exercise, as we are reminded that rates are impossible to predict when based on risky securities as COVID news from South Africa, and while residential lenders (including jumbo and non-QM segments) await the FHFA’s annual setting of Freddie and Fannie compliant loan limits, unfortunately we Remember that the layoffs are not limited to wholesalers across the country. For example, Chicago Interfirst informed the authorities of a round in Charlotte. (Anyone looking for a job can post their resume for free on www.LenderNews.com and employers can sign up for a small fee to see them.) The American Trucking Association has warned that 2.5 million drivers will quit their jobs if the Biden administration does not rescind its coronavirus vaccination mandate, which was suspended by the Fifth Circuit Court of Appeals. While we’re talking about work, in Portugal it’s now illegal for your boss to call outside of working hours! (The podcast’s engineering team took their day off today, but normally the today’s audio version of the commentary is available here; those interested in sponsoring it or being interviewed for an upcoming show should contact Robbie Chrisman.)

Non-QM, ARM and Jumbo Trends

How does your business’s Variable Rate Mortgage (ARM) offer look? ARMs have been dormant for some time, although borrowers with ARM loans created years ago have benefited from the drop in their rates. The latest figures from the MBA survey show that, of all applications last week, ARM’s share has increased to 3.4% of total applications. (The refinancing share of mortgage activity rose to 63.1% of total applications, down from 62.9% the week before.)

In the jumbo sector, the rates are not much higher than compliant. The MBA tells us that “the average contractual interest rate for 30-year fixed rate mortgages with compliant loan balances ($ 548,250 or less) has fallen from 3.20% to 3.24%… The average contractual interest rate for 30-year fixed rate mortgages with jumbo loan balances (greater than $ 548,250) increased from 3.28% to 3.28%… ”

Residential lenders issued about $ 168.0 billion in non-agency jumbo mortgages in the third quarter, up 6.3% from the April-June cycle, according to a new tally from Inside Nonconforming Markets.

On the non-QM (qualified mortgage) side, non-QM loans had a small market share before the pandemic and were gradually increasing before March 2020. When COVID-19 hit, as we all remember, the non- market. QM crashed, providing ammunition for those who oppose addiction to private label titles. Non-QM loans are definitely not subprime, but there are some attributes reminiscent of this area. For example, companies offering non-QM loans often refer to this product by different names and offer different LTVs, prices, underwriting guidelines, and treatments from each other. But wholesalers and correspondent investors often advertise that lenders can use non-QM mortgages as an alternative when conventional rates rise.

Plaza real estate loan® has expanded its Jumbo loan options with Jumbo AUS 2. Like its original Jumbo AUS, (now called Jumbo AUS 1), Jumbo AUS 2 leverages Agency AUS findings for streamlined documentation requirements, has DTI at 45% and a minimum of FICO at 680.

Discover Plaza’s two Jumbo AUS programs and its Jumbo 1.

PCF wholesale offers a variety of loan options for your borrowers. Conventional, FHA, VA, Jumbo & Non-QM. 12-24 month bank statement options, 1099 only, asset usage, income statement only. Foreign national and DSCR with FICO Up to 600. Browse the PCF wholesale website for more information.

Wells Fargo Financing increased the maximum DTI ratio for ARMs to 43% align with the DTI ratio for non-conforming fixed rate mortgages. Effective for loans taken out as of October 25, 2021.

Wholesale fairway loan announced the release of the 15-year fixed rate option on the AUS Jumbo Non-Agency program effective for blockages from 10/22/2021, including outstanding loans. This option is available in addition to the current 20 and 30 year fixed rate options. As a reminder, the AUS non-agency program is an additional jumbo option offering various flexibilities that the Jumbo QM program may not allow.

LendSure Mortgage Corporation has a new product, Fix N Flip Loans. Designed for investors who are in the business if they are buying distressed homes. Contact Kelly Brown – [email protected] for more details.

Capital markets

Not many people are blocking loans today, but it’s still good to check out what was causing mortgage rates to move on Wednesday, especially with the multitude of data (jobless claims, hitting their lowest since 1969, third quarter GDP , revised up slightly, durable goods orders, with continued growth in business spending, new home sales below consensus, personal income gains wiped out by inflation in October and the final consumer sentiment index Michigan for November revised up). Oh, and don’t forget the November FOMC meeting report which noted that the committee sees downside risks to growth and upside risks to inflation. Of particular interest were the initial statements reaching their lowest level since 1969: expect them to be factored into thinking that the Fed will need to be more aggressive with its cuts plans.

The increase in new home sales… but at a lower annual rate than expected, has been of interest to the people in our company. Year over year, new home sales are down more than 23%… Growth in new home sales is concentrated in higher priced homes. At the lower end of the home price scale, inflationary pressures, exacerbated by supply constraints and labor shortages, hit affordability hard for low-income buyers who would purchase homes. low cost houses.

Looking at today, with no scheduled economic news, and its early closing, and if someone is going to lock in a loan … well, Mortgage Backed Securities Prices 0.5-0.75 Better From Wednesday’s Close. (Remember that the 10-year yield, although traders don’t base MBS trading on 10-year yields, closed Wednesday at 1.65% and fell to 1.53%.) That is a poorly traded and illiquid market here in the United States, but pandemic news a) with the foreclosure measures of Belgium and Austria, and b) the mainstream press seizing a new variant in Africa South (where only 35% of the population is vaccinated), moves trade away from “risk”. Stock prices have fallen dramatically and bond prices are rising, leading to lower rates.

Will it last? The Fed is in a difficult situation, on the one hand driven by the inflation news, but subject to the same overall risk as all of us. After only one day of pandemic news, analysts are already pushing back expectations for rate hikes. Reflex? We just don’t have answers, and this proves once again that when markets are guided by headlines rather than fundamental news, rates cannot be predicted.


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