We try not to use exclamation points on headlines if we can help it. In this case, it’s warranted. Ever since the stimulus package was enacted, we’ve been waiting for better pricing on the jumbo product backed by the mortgage giants Fannie Mae and Freddie Mac.

Last week, Fannie Mae announced improved pricing for the 30 year fixed rate agency jumbo product. The rate had been hovering around 6.50% at a 1 point cost. Now, it’s held steady for the past week around 5.875% at the same 1 point cost.

For comparison purposes, it should be noted that current conforming 30 year fixed pricing is around 5.625%. Standard jumbo pricing is still above 7% in most cases.

This is good news for all borrowers that are eligible. You have a limited window to refinance - the increased jumbo loan limit is temporary and is only going to last  until the end of 2008.

As this mortgage crisis continues to escalate, First Equity Direct has set up an ancillary service to provide assistance to the thousands of home owners who can no longer afford their mortgage and are unable to refinance. Our affiliate company, American Mitigation Group, will assist borrowers with loss mitigation and other options to prevent or cease foreclosure.

If any of these questions below apply to you or someone you know, we can help.

• Are you in an option ARM?
• Are you struggling to make monthly payments?
• Has your interest rate increased?
• Has your property value declined?
• Have you suffered a hardship?

Since 1995, First Equity Direct has helped thousands of clients achieve the goal of home ownership. In these troubling times, it is our goal to help you keep your home. If you or anyone you know is struggling, please pass this information on.

Here is a list of programs we are offering to help homeowners stop foreclosure or avoid it altogether.

• Loan Modification
• Short Sale
• Forbearance
• Deed-in-lieu of foreclosure

To learn more, please visit: www.amgsaveshomes.com

Warm regards,

Kathy Larson
Scott Bertone
Co-Founders of First Equity Direct

Reading various opinions on the blogs, news sites and forums around the grand ol’ internet, it looks like we can expect as much as a .25% cut to the Fed Funds Rate. It is also a strong possibility that the Fed will stand pat and leave it at its current rate of 2.25%.

There is some speculation that the Fed could be done cutting rates for awhile and that they will begin to leave the rate alone when they meet.

Any expectation of a huge effect on mortgage rates is likely to be unfounded. With previous rate cuts, lenders have already priced it in to their rates and we’ve rarely seen any bug movement in the mortgage market.

Still, it will be worth a look when they meet next Tuesday and Wednesday. Check back for further details.

One of the experts at Yahoo Finance who regularly writes features pertaining to the mortgage industry has done a two part series on what makes a good mortgage broker. You can read part 1 and part 2 on Yahoo’s website.

For the purposes of this blog, we thought we’d look at the concepts of the article and how First Equity Direct operates.

Borrowers Select Good Brokers

This is absolutely true. Just about any brokerage advertises (and First Equity is no exception), but a true sign of whether or not a broker is trustworthy and legitimate is the amount of people who are referred to a business. If someone has a bad experience, they don’t tell a friend or family member to use the same company. All of our loan officers have deep client bases that continually come back and refer others. We want to create a positive experience where you feel like you can get genuine advice, not a sales pitch. We only encourage you to go through with a loan if it’s right for your situation.

Clues to the worthy broker

The author’s general premise is that a worthy broker listens intently and asks pertinent questions before offering any sort of opinion on what you should do.  No disagreement here. If you find yourself getting a rate quote from a broker before even one question is asked about your situation, hang up and move on. No one can give you an accurate quote and even pretend to know what’s best for you without first getting to the bottom of a few issues. For example, we need to know your current mortgage situation, your future plans, your financial picture and so on before we know what program to quote and what rate is available.

Another clue offered is that the broker operates transparently.  This is a good thing to mention. Brokers have received bad press in the past for hiding fees and being less than dishonest about your loan. It is required that a broker provide you with a Good Faith Estimate (GFE) detailing fees and important details. Some brokers may try to confuse you. If you have questions and don’t understand it, ask. A good broker will willingly explain everything and even work out some of the fees if it is determined something is off.

Good Brokers Will Not Quote Low-Ball Prices 

This is an agreeable concept with an exception. The author states that you should avoid any broker who gives a really low rate without quizzing you about various loan criteria and this is true. However, you don’t necessarily have to be afraid of a broker with the lowest rate. We work hard to find the best rate offered on the market because we want you to get the best deal. As such, we have a lot of lenders we can work with and often do beat the competition on rate. The main thing to take away is, make sure everything pertaining to your situation has been covered and that the fees aren’t outrageous before accepting a lower rate.

Good Brokers Try to Find the Best Price Available

This basically is what we are saying in the above paragraph. There is a lot of hard work that goes into finding great pricing. It takes teamwork, diligence and smarts to sort through over 100 lenders nationwide to secure a low rate that fits a specific borrowers criteria.

 Good Brokers Are Masters of Detail

This is more true than ever and probably deserves its own space (file it as a topic for next week). Lenders are going over every loan with a fine-tooth comb these days. They are looking for a reason to decline the loan. First Equity has instituted safe-guards in our processing to make sure mistakes aren’t made and we comply with exactly what the lenders want. This will make an incredible difference when it comes down to getting your loan approved.

Good Brokers Keep Their Clients Informed

Yes, yes, and yes. Did we say yes? Communication breakdowns can kill a loan. Remember, it’s a two way street. We will keep you updated and make timely requests for information, but we need you to act in a timely manner as well. This will help avoid unneeded problems.

Good Brokers Attend Closings When Needed

This isn’t always possible. Sometimes a broker is just too far away. If you keep good communication throughout and your broker offers his/her advice whenever needed, you probably won’t need the broker at the closing. However, if we are local to the borrower’s area and it is something you would appreciate, we are always willing to offer our help.

Good Brokers Get Documents From Lender Prior to Closing

We are happy to accommodate this request if you need the documents  for review or any other reason. In fact, it’s a good idea so that you don’t feel stressed out when signing the lengthy documents.

Good Brokers are Experienced

More than ever, you need an experienced broker to handle your loan. It’s become so much more complicated to get a loan funded and an emphasis has been placed on qualified professionals that know the ins and outs of the mortgage industry. All of our loan officers are well-qualified with years of experience in the industry. We do not employ loan officers without prior experience in the business.

Good Brokers Communicate Effectively With Borrowers

There’s not much difference between this and the previous notion about keeping borrowers informed.  Communication is key. There’s really no arguing that point.

Good Brokers Are Straight With Their Clients

You could pretty much write the above as good ________ are straight with their clients - you just have to fill in the blank. Anybody that’s worth doing business with is going to be up front about your options and won’t hide important details. The article has some good examples of how to tell when a broker is being less than honest.

Here’s a few things to remember:

• Loans cost money - someone is providing a service for you. You wouldn’t expect to go to the grocery store and get everything for free. Anyone that tells you there are no costs on your loan is lying.
• Low rates - we’re talking ridiculously low - like 1.5% just don’t exist in responsible, smart loan programs.
• Rates fluctuate according to the market and it’s not always easy to predict. Any broker that is “certain” a rate will be at a certain spot in so many years just isn’t being truthful.
• Those ads that say “pay $799 a month for a mortgage” are not worth the time it takes you to click. If you were to get into that loan, you’d be committing financial suicide. They probably never intend for you to even do that loan, but still, they are advertising it, so do you really trust what you’re getting?

News is moving fast in the mortgage industry. We have stimulus packages, rate cuts, bailouts and so on. We thought it might be helpful to provide a breakdown of what’s happened recently and what the effect might be.

STIMULUS PACKAGE ENACTED

We’ve mentioned this a lot in this space, but thought it would be wise to offer a refresher.

What it is: A temporary relief package for homeowners in high cost areas. Conforming loan limits have been raised to as much as $729,750 depending on the region.

What it means to you: If you live in a high cost area, it could be just the thing to help you refinance your home loan. Our loan officers have information regarding how this loan limit increase affects individual areas. April 1 is the date that has been set for lenders to start offering these new rates, though some lenders have already begun to roll out their new conforming loan programs.

FED RATE CUTS CONTINUE

Last Tuesday, we saw yet another rate cut from the Fed in an effort to help the mortgage lending industry.

What it is: Beginning last September, the Federal Reserve began cutting its key rates in an effort to bolster a struggling economy. Currently, the Fed Funds rate sits at 2.25% while the Fed discount rate is at 2.50%. Both are key indicators for the mortgage market.

What it means to you: While intuition would tell us that the Fed lowering rates automatically should signal lower mortgage rates, it hasn’t gone that way. Investors have become leery of the mortgage industry and lenders have significantly tightened their standards. Lenders are choosing to hold rates steady while taking advantage of the rate cuts to boost balance sheets and pay dividends.

MARKET VOLATILITY A COMMON THEME

What it is: Each week, we seem to be seeing fluctuations within the mortgage market. Rates go up, rates go down and nobody seems to be able to get a handle on what is coming next.

What it means to you: In such a volatile market, the best thing you can do is be prepared. There are pockets here and there that bring advantageous rates to homeowners. They may last a day, perhaps just half the day. It’s that crazy. If you’re serious about refinancing, you should get your information on file, so that when a rate becomes available, all you have to do is call or email a loan officer and request the rate be locked. Any delay, no matter how shot has the potential of messing up a great opportunity.

BEAR STEARNS REQUIRED FEDERAL BAILOUT

What it is: Bear Stearns is a major US-based lender that recently hit bottom and was saved only by the Fed’s $30 billion bailout that allowed JP Morgan to buy shares at $2 apiece.

What it means to you: There’s no real way to sugarcoat the situation. Foreclosed homeowners want to know why the government can’t come up with a bailout of their own situations and many fear a bad precedent has been set in the event that more lenders face a similar fate. Mortgage rates don’t seem to have been deeply affected and we’ll have to wait and see what the ramifications are down the road.

Fed chairman Ben Bernanke spoke recently and pledged to do all that is possible to help struggling homeowners.

Quoted in an Associated Press article while speaking at the National Community Reinvestment Coalition’s annual meeting, Bernanke said the Fed is “strongly committed to fully employing our authority, expertise and resources to help alleviate their distress.”

On Friday, the Fed acted quickly to offer a rescue package to Bear Stearns in an effort, along with JP Morgan, to save the institution.

Additionally, the Fed continues to lower key benchmark rates each time it meets. They are expected to again slash rates next week.

It remains to be seen whether or not these and other efforts, along with the stimulus package recently enacted,  will ultimately provide the necessary relief or not, but nobody’s going down without a fight.

To discuss how the Fed and government programs can benefit your situation, feel free to call and speak with one of our experienced loan officers.

After much talk in the preceding month, Fannie Mae has officially increased their loan limits and will purchase jumbo-conforming mortgages. The new loan limits are applicable only to high-cost areas and will be calculated based on the location of the subject property as follows:

• 125 percent of the area median home price in high-cost areas, not to exceed $729,750.

Pricing is already becoming available and will likely become more widespread in the following week.

It appears the new jumbo-conforming loans will be about .125% -.25% over current conforming rates. Today’s 30 year conforming fixed rate is 6.25% at zero cost, significantly lower than the current jumbo market.

We will keep you posted as more information becomes available.

To get more information about affected areas, please call (866) 636-6306

The headline might be lacking creativity, but it’s good news for borrowers. Many people that missed out on the opportunity that was available one month ago when rates bottomed out are getting a second shot at securing a low interest rate for a refinance or purchase.

We’ve seen our conforming 30 year fixed rate drop all the way to 5.625% down from a high of over 6.00% just earlier this week. On the jumbo side, our 30 year fixed is holding steady at 6.25%. While higher than our posted rate last week, considering the dramatic upward movement of the jumbo mortgage market, it’s an incredibly low rate -  .57% lower than the national average of 6.82% according to Bankrate.

With the market’s uncertainty, it’s highly recommended to at least make contact with one of our loan officers to see if this is the right time for you to lock in a rate.

We recently introduced a new addition to our website called Mortgage Daily. This is a great starting place for visiting our website. Most days will feature a new article or blog posting as well as highlighted rates and a link to additional programs. You’ll also find info about national average rates, links to our most popular calculators and daily rate lock advice.

Look for more updates in the future as we add more content and features.

Check it out, bookmark it and we promise to keep you up to date

Mortgage Daily

Mortgage rates have been going up all week. Data from Bankrate.com shows that rates on the conforming 30 year fixed loan have risen to nearly 6.00%.

The non-conforming market has seen rates shoot skyward as well. According to Bankrate.com, the average 30 year fixed jumbo loan has risen to nearly 7.00%. Previously, rates had been declining since early January.

With regards to ARM pricing, the 5/1 conventional ARM is averaging 5.17% while the jumbo 5/1 ARM shows a national average of 5.82%. This, again, is according to Bankrate.com and rates may contain points.

During this time, First Equity Direct has utilized its large lending network to maintain affordable rates. Here’s a comparison as of Friday, Feb. 22: