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Conforming loans are securitized and sold by Fannie Mae and Freddie Mac. These so-called ‘government sponsored entities’ provide an implicit guarantee to investors that the loans will be repaid; investor confidence in the securities translates to low rates for the borrowers. That is why conforming loan rates are lower than the rates for jumbo mortgages. The conforming loans originated in Alaska and Hawaii are packaged into the same security pools as all other conforming loans, even though the loan limits are higher. This is why the interest rates are the same for those larger loans.
However, the new program is being instituted in a completely different fashion. Fannie Mae and Freddie Mac are concerned that investors will shy away from their securities if they included the new higher limit conforming loans in the same pools with the lower limit loans. If this happened, rates would go up for all conforming loans. So, they created separate pools for the new higher limit loans.
Because the loan limits are higher the investors perceive that these ‘jumbo-conforming’ loans are riskier, and they want a higher return to invest in the securities, as well as tighter lending guidelines. The implicit guarantee that the government will stand behind Fannie and Freddie has always translated into higher prices for their securities, and lower rates for their borrowers. Now, however, investors are very shy of any risk, and the fact that these new jumbo-conforming securities are being sold separately from the other conforming loans has caused investors to pull back, keeping the rates high, and the guidelines tight. In other words, a jumbo-conforming loan is just a jumbo loan, and nothing has changed – at least not yet.”
Colette Moorehead specializes in residential refinance and purchase loans. To find out more about her, visit http://www.sfmortgage.com/who-we-are/colette.html or email her at email@example.com.
And now for Paragon’s Upcoming Listings. You might notice, there seems to be a bit more at the high end than usual. I think that is because the high end really is not as affected and is continuing to trade at normal prices and volume levels despite what is happening in more affordable price ranges. As always, if you see anything that piques your interest or that of a friend, I’d be happy to get you in early for a private showing:
$3,000,000/ Noe Valley/ BR/BA: 3/3 PKG: 1 SFR thoughfully renovated 30’s home. 3000 sq ft. Detached 3 sides. So facing garden + terrace. Bay views. Open LR/DR, Den, Media Rm, Office. Rare home for SF.
$1,499,000/ UKIAH/ BR/BA: 3/3 PKG: 640 Acres Wine Country Estate 2 hours from the Golden Gate, private, magnificent views, stunning indoor/outdoor remodel. Redwood forests, meadows, hiking and biking trails.
$1,250,000/ Telegraph Hill/ (right under Coit Tower) BR/BA: 2/2 PKG: 1 Quintessential San Francisco condo w/stunning views of the Bay and Bay Bridge. This spacious, top-floor condo features nicely updated baths and kitchen, bamboo floors and a private deck that seems to sit atop the Bay. This is a great condo for your clients who want to be near everything.
$1,050,000/ South Beach BR/BA: 2/2 1 car deeded parking 180 degree views of Bay Bridge to Twin Peaks. Built in Murphy bed and office, upgrades throughout.
$859,000/ GUERNEVILLE/ BR/BA: 2/2 PKG: 6: A unique Russian River home occupies a sunny clearing inside 10.5 acres of pristine, private redwood forest. A bright, airy floor plan is ideal for entertaining, with cathedral ceilings, hardwood floors, and elegant urban style. High-speed Internet, Restoration Hardware and Kohler throughout; a cozy office is plug-and-play. Five minutes to Guerneville, 15 minutes to coast and wineries/
$749,000 / Midtown Terrace/ BR/BA: 2/1 with unwarranted BR/BA: 1/1 down – flows very nice so it feels like a split level not a room off the garage. PKG: 1 Car – Garage + ample Street parking/ Main level consists of 2 bedrooms and 1 remodeled bath, remodeled kitchen with ss appliance, living/dining room combo – new windows, new roof, refinished hardwood floors; downstairs has an additional bedroom/bath (legality not warranted by seller), recently painted inside and out, very private, landscaped rear yard with sprinkler system, updated systems – move-in ready and priced to sell!
$699,000 / Excelsior/ BR/BA: 2/1 PKG: 1 Brief description: nicely remodeled Marina style house with 2BR, 1 bathroom, French doors leading from the kitchen to the back yard. FDR, wood-burning fireplace, 1-car garage. LARGE semi-finished room down with hig ceilings. Hot Tub & outdoor shower in back yard.
$519,000 / North Waterfront/ BR/BA: 1/1 PKG: 1 / currently rented for $2,500mo; Tenant moves out 4/22. Great corporate rental, 2nd home (furn. incl.)
$499,000 /Emeryville/BR/BA: 1/1 PKG: 1—Exquisite and very large NY Style, conversion loft, Emeryville Warehouse, large bedroom which is semi private (with a door), bathroom is split and accessed via bedroom and foyer, open kitchen, dining, living, hi-ceilings, plenty of storage space, in-unit laundry, one indoor parking space, Views to the north, slightly west and east to the Oakland/Berkeley Hills with great natural light.
$2,995,000, /Buena Vista Park/ BR/BA: 4/5 PKG: 1 Exquisitely renovated Queen Anne across from Buena Vista Park, sweeping City views from LR, DR, kitchen & Master en-suite, designer finishes throughout including Walker Zanger & Ann Sacks tile, Viking, Wolf & Thermador appliances, Dornbracht faucets, custom paint colors, also features a media room, laundry room and wine room.
$1,895,000 / Monterey Heights / BR/BA: 4/3.5 PKG: 2 Great opportunity to get you clients into contract before publicly marketed. Remodeled 4/3.5 with FDR, 3/2 upstairs, 1br down plus family room. Small back yard.
$995,000 / Noe Valley / BR/BA: 3/2 PKG: 2 2 level stand alone condo that feels like a SFH; No shared walls; Deeded patio/deck; Diligently maintained ($0 pest); Meticulously refurbished (owner is a property inspector);
$799,000 / Cole Valley/Haight Ashbury /BR/BA: 2/2 PKG: 1 car + storage. Top Floor newer styled condo in small 3 unit building. Currently Tenant Occupied until July 1st. Hard to show but I do have great photographs to start. Fantastic light and storage, with large private patio off Master Bedroom with dead on views overlooking St. Ignatious Church. Seller willing to entertain offers off market
New Price: $819,000 Old Price: $859,000 / Twin Peaks/Upper Market/ BR/BA 2/2 PKG: 1 Another fabulous property by the architect/owner, Joel Karr,of Group 41. Dramatic open floor plan, stunning architectural renovationsm splendid top flooir condominium. Handsom kitchen features granite slab countertops,abundant beautiful maple cabinetry, new appliances.
And last but not least – SF expands Recycling program in honor of Earthday, April 22