Rates Stink for Jumbo Mortgages

On my daily perusal of mortgage rate sheets today I saw striking evidence of the further worsening of options for those who need jumbo mortgages.

Here is a snapshot of the Jumbo ARM pricing of one national mortgage company:

• 7/1 ARM at 8.25%
• 3/1 ARM at 9.0%
• 6 month ARM at 12.5%

If you are scratching your head I don't blame you.  Normally, rates get lower for shorter fixed-rate terms on ARM programs.  Those listed above show rates getting much worse for shorter term rates.

What does this mean?

This just shows how cautious and uncertain a large financial institution is about the near future.  This lender is pricing themselves out of the market, they don't want it any more. 

It also means that for those who need jumbo financing, your options continue to dwindle & get more expensive with every passing day.  Unfortunately, I believe that this will continue to be the case for at least another 12 months.  The only thing that will cure this is the rebuilding of confidence in these loans and that means new originations the perform (payments come in on time) to build a track record that captures investor interest again.  That doesn't come quickly.

Brett