MORTGAGE WARNING! Pricing changes coming! Realtors this effects you as well!

Mortgage and Lending with Your IRA guy!

This will indeed suck for everyone!  Be ready because it's coming, Fannie and Freddie are implementing this so, in order for the lenders to make these loans saleable, they will have to utilize these add ons.


FannieMae and FreddieMac have recently issued changes to loan level pricing adjustments that will take effect for loans purchased in early in 2008, however our Investors for new locks will need to implement these changes well in advance of the FNMA/FHLMC purchase dates.

These pricing changes are for Conforming Loan Programs with the following terms only:

Pricing adjustments will apply to loans with terms of 20 years, 25 years and 30 years with LTV's of 70.01% and above, with certain "representative" credit scores, as follows:

Credit Scores below 620 2.00 point charge

Credit Scores from 620-639 1.75 point charge

Credit Scores from 640-659 1.25 point charge

Credit Scores from 660-679 0.75 point charge

This isn't specific to any one lender, its new FNMA/FHLMC guidelines.  For our bank personally, Citimortgage has already implemented these pricing changes.

Lock your people and get the pre-qualified buyers off the fence!  This can be eaten in pricing but, it'll drive rates up for eveyone!

BTW, This makes FHA just a stronger avenue! 


Comments (5)

R. B. "Bob" Mitchell - Loan Officer Raleigh/Durham
Bank of England (NMLS#418481) - Raleigh, NC
Bob Mitchell (NMLS#1046286)

I saw this and think that it's a sad day!  It's another brick in the wall that is going to keep people from owning homes!  As I said, Sad!  Especially when you consider how terrible credit scoring models are!  By the way, why is Citibank implementing these price changes now when Fannie Mae isn't going to implement them until March 8, 2008?


Bob Mitchell

ValueList Real Estate Services, Inc. 

Nov 27, 2007 05:25 AM
David Squier
Keller Williams Realty Las Vegas - Las Vegas, NV
Thanks for the heads up. Maybe a good tool to get some of those "waiters" off the fence.
Nov 27, 2007 05:34 AM
Jess Rankin
Pickering Group - Phoenix, AZ
Great post!  Get em off the fence...great thought.  Jess Rankin
Nov 27, 2007 05:45 AM
Michael Schindler

Thanks for the responses.  Sad day indeed- now this mess is effecting the decent "conforming" loans as well-its not enough guidelines have tightened, now it is coming at a greater cost to the consumer.

I don't know why Citi is bringing this out now.  Perhaps it's because they are in "trouble" and want loan intake to slow with a flight to better quality (i.e. better Loan to Values)?  To me, this tells me there's indeed something up at Citi-we know they just got in influx of cash from overseas (similar to Countrywide's situation) but for them to come out and adhere to this that early is a bit puzzling.




Nov 27, 2007 07:47 AM
Eric Sunsdahl
Citizens State Bank NYA - Norwood Young America, MN

Ok, this is not 100% in line with your article here. Why is it that all these problems are being blamed on the "housing" issues? What about the fact that insurance has more than doubled in the past ten years? Or the fact that property taxes keep going up, not because of rising values but because the counties keep spending and spending. Nicer roads and bigger Hockey rinks, bigger schools, round about roads and so on. There are more issues going on here than just the housing market.

Dont think I mentioned the fact that tuition for college has gone up 10% a year for the past several years. How much is my 18 month old daughter going to cost to send to college? Is my only hope to win the lottery so she can get an education?

Dont blame the whole problem on housing when its a whole lot more than that.

Nov 28, 2007 06:54 AM