September 3rd, 2009 6:48 PM by Eric Fang
Like any investors, the lenders are reviewing their holding portfolios and rotate some loan programs once in a while to balance their holdings to limit their risks and maximize their profits.
The lenders financed lots of fixed loans in the 1st half of 2009. And starting June 2009, they started some ARMs, especially some high-balance ARMs. Those ARMs have a little bit higher risk but the profit margin is also higher(lenders like ARMs, if the borrowers do not default). That's why we saw therecent ARM rate around 4.5% to 4.625% for 5/1ARM.
Some of those ARM refis came from the refi ARMs with higher rates, others from refi of the fixed 30 yr fixed.
When the lenders have the percentage of ARMs over thelimit, they will try to get more fixed rates soon.
We expect the lender will have some aggresive rates on the fixed programs starting Oct. We should have good rates on conforming 30 yr fixed and high-balance 30 yr fixed.
And we do have lenders offer good rates for 729k loans starting Sep 8th. The best rate will be for LTV 75% or less.
Enjoy the Labor day Weekend!