Jumbo mortgage rates are improving.

We advised home buyers to cautiously float their loans last week; nothing happened to mortgage rates.  There is still an irrational fear in the mortgage rates markets about inflation which is causing the lenders to remain stubborn about pricing.  We are changing our stance to a locking bias.  That's research talk for "we think you should lock your loans because we're chicken about the economic figures due out towards the end of the week".  So, if you haven't locked in your loan, and you're less than 21 days from your close of escrow, go ahead and lock.

Rates we're offering, for loans under $417,000, as of September 26, 2007:

Program                    Rate                    APR

Annual ARM            5.625%                5.693%

3/1 ARM                 6.000%               6.070%

5/1 ARM                 6.125%               6.217%

30 Year Fixed          6.125%               6.217%

Rates subject to qualification and market conditions.  Equal Opportunity Lender.

Now, for some REALLY good news.  Pricing for jumbo rates  is improving.  Rates for stated income loans  are getting lower.  If you have applied for a loan that is greater than $417,000 or are not documenting your income, we think you can safely float the rate.  Wall Street investors are dipping their toe in the jumbo and stated income loan markets and starting to buy those loans. 

The portfolio lenders that scalped us when the Wall Street investors stopped buying jumbo loans (portfolio lenders don't sell to Wall Street; they hold the loans) are now aggressively pricing their jumbo loans.  The  jumbo mortgage rates are still not as competitive as they were on July 31, 2007 but THEY ARE IMPROVING.  This aggressive move by the portfolio lenders tells us that the conduit lenders, that sell jumbo loans to Wall Street, are getting good news.

Call me at (858)-503-2318 for jumbo mortgage rate pricing or e-mail me.

In summary, lock loans under $417,000 and float loans over $417,000.  The liquidity crisis ain't over but the desert we've lived in since August 2, 2007 is starting to smell like rain.  That's good news.