July 14th, 2011 10:00 PM by Eric Fang
In the middle of the Jan, when the rate was highand the business was slow, I talked to one of theunderwriters from Provident Funding, and I told her that I would send 8-10 ARM loans to PF in thenext two weeks, and then "luckily" the ARM ratesheaded lower. And later I predicted that ARM rates would hit history low, and then I predictedthe ARM will hit the bottom and will bounceback. You can see those posts from the history blogs.
In late May, I talked to some of my loan agentfriends and told them to close those PF loansasap and the ARM rates would go up. And at the same time, when other agents were promotingthose great PF loans, I started originationof those fixed loans. If you follow my blogs,I predicted the 30 yr fixed rates will be loweraroudn 4.375% level. And indeed it hit the targets.
For the last a few days, if you read my blogs and rates, I promoted those 10 yr fixed loansand 15 yr fixed loans. For 10 yr fixed ratesaround 3.375%; and 15 yr fixed rates around 3.625% to 3.75%.
Those markets may not be big, but it hit thenitch of the following scenarios:loan amount around 200k to 250k; they don't likeARM rates; and also not that attractive(becauseof the small loan amounts); but the 10 yr fixedor 15 yr fixed program will help them to ease the worry of future inflation and still geta very good rate and payoff the loans faster.
My next target program, maybe 10/1ARM conforming loans. The target clients will be those with 30 yr fixed clients. And it will be another marketif 10/1ARM hit 3.625% to 3.75% level. Let's wait and see.