(Read More: Housing Recovery Leaves Some Behind)

The jumbo securitization market is tiny, however, as most jumbo loans are still held on bank balance sheets. There are so far just two players in jumbo securitizations, Redwood Trust Inc. and very recently Credit Suisse Group AG, although others, including JPMorgan Chase, are preparing to join them.

There were no jumbo securitizations at all between 2008 and 2010. When Redwood dipped its toes in, securitizations totaled less than $1 billion in 2010-2011. By 2012 they hit $3.5 billion, according to Inside Mortgage Finance, and are already at $2 billion so far for 2013. Hebron believes they could surge dramatically in the very near future.

The rebirth of jumbo securitizations is being driven not just by investor confidence, but by growth in jumbo originations, which increased after the conforming loan limit was lowered. Originations of non-agency jumbo mortgages jumped by over 19 percent in 2012 from 2011, according to Inside Mortgage Finance.

So why is the conforming-jumbo spread shrinking? Not because jumbo rates are falling but because conforming rates are rising due in part to government intervention.

“Congress keeps raiding the guarantee fees (g-fees) Fannie and Freddie charge lenders in the securitization process for other purposes, like funding payroll tax cuts,” noted Hebron. “For each 10 basis point hike in g-fees, we’ve seen consumer rates rise about 0.125 percent.

Article source: http://www.cnbc.com/id/100543189

“Sales are subpar, prices mainly flat and I don’t anticipate much change,” said Andrew LePage, an analyst with San Diego’s DataQuick, which produced the report. “Lots of people are stacked up on the sidelines, waiting for a better time to buy or sell when things are more certain.”

The median price for all homes – resale, new and condos – sold across the nine Bay Area counties in November was $363,500, down 4.3 percent from a year ago.

The total number of properties changing hands edged up 3.4 percent to 6,317, compared with last year.

Not much inventory

Low inventory remains an issue as many people are reluctant to sell, said Rick Turley, president of Coldwell Banker’s Bay Area region.

“The home seller who becomes a move-up buyer is almost like a missing generation,” he said. “We have some people out there with an appetite (to buy) who have a down payment and can qualify, but because of the ho-hum market, there isn’t inventory for them.”

Turley said he sees about 4 1/2 months’ worth of inventory for high-end homes and just a few weeks’ worth on the low end.

Cindi Hagley, managing broker at Prudential California Realty in San Ramon, observed similar dynamics.

“We have multiple offers on almost everything we sell for under $400,000,” she said.

But at the other end, “People who could theoretically afford to buy bigger homes are hunkering down a bit,” Hagley said. “People are downsizing” rather than moving up.

High-end sales are also taking a hit from a change in the conforming loan limit, which eliminates most government-backed mortgages between $625,501 and $729,750. Lawmakers restored FHA loans in that bracket, but Fannie Mae and Freddie Mac mortgages are no longer available.

“We don’t know yet to what extent FHA and the private mortgage market can fill that void,” LePage said.

The tighter financing for high-end homes is reflected in declining sales volume.

Low-price purchases

For instance, in Santa Clara County, November sales of homes over $800,000 were down 18.2 percent from a year earlier, while sales of homes under $300,000 rose 22.3 percent compared with November 2010, LePage said.

Throughout the real estate downturn, sales of higher-end homes have declined dramatically. Mortgages above $417,000 accounted for about 29.7 percent of November’s purchase lending, DataQuick said. Before 2007, such “jumbo” mortgages represented almost 60 percent of local purchase loans.

Distressed sales – foreclosures and short sales sold for less than is owed on the mortgage – remain a potent force, accounting for almost half of all resales in the Bay Area in November.

Investor activity remains high, with absentee buyers snapping up 22.6 of all homes sold last month compared with a regular monthly average of 13.9 percent since 2000. All-cash buyers represented 27.9 percent of November sales.

Other national reports out this week underscored the market’s continued malaise:

– Real estate service Zillow.com said values nationwide were down 5.1 percent in October compared with a year earlier. In the San Francisco metropolitan area, it said, values fell 6.3 percent and are now 33.8 percent off their peak.

– Foreclosure service RealtyTrac said November foreclosure filings nationwide were down 14 percent compared with a year ago. But the company said that despite that seasonal slowdown, numbers suggest a new surge of foreclosures in coming months.

California foreclosure auctions hit a 10-month high in November and the state had the nation’s second-highest foreclosure rate (after Nevada) with 1 in every 211 properties receiving a foreclosure filing in the month. Bucking the national trend, California foreclosure filings rose 11 percent in November compared with 2010.

– Move.com, the nation’s largest online collection of for-sale listings, with data from all of the country’s 900-plus multiple listing services, showed national inventory down 21.3 percent in November compared with a year ago and median list prices up 4.05 percent.

In the counties of San Francisco, San Mateo and Marin, Move.com showed median list prices basically flat compared with a year ago and inventory down significantly. Homes in those counties sold much faster than those elsewhere in the country, with an average inventory age of 76 days versus 114 days nationwide.

E-mail Carolyn Said at csaid@sfchronicle.com.

This article appeared on page D – 1 of the San Francisco Chronicle

Article source: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/12/15/BU6K1MCHQJ.DTL

Fannie Mae and Freddie Mac, the private mortgage lending entities under government conservatorship, are set to reduce their maximum conforming loan limit from the current $729,750 to $625,500 on October 1st. Bay Area mortgage broker Eric Leithliter of California Mortgage Advisors says this may adversely affect the Bay Area real estate market, making it harder for homebuyers to get loans and lowering home values. He recommends that people who have been waiting to buy act soon, before the loan ceiling is lowered.

When the financial crisis hit in 2008, the government-sponsored entities (GSEs) Fannie Mae and Freddie Mac tried to combat the tightening home lending market by temporarily raising the limit on conforming single family home loans to $729,750 [for the more expensive counties; some counties have a lower limit], an amount that has been renewed every year since. But in the current political climate, with a focus on reducing the national debt and encouraging private sector action, the federal government seems unlikely to renew the higher conforming loan limit. If congress allows the loan limits to drop, the highest conforming loan limits will go down to $625,500.

“If you have been sitting on the fence, thinking that rates are going to continue to go down, they may want to consider making a move soon. Waiting until later may limit your ability to get a low rate on a single mortgage loan, making it more expensive and time-consuming to buy,” says Eric Leithliter, a Bay Area financial advisor based in Walnut Creek.

Leithliter says that if the conforming loan limit is allowed to drop, it could a negative impact on the local housing market. Nonconforming loans carry a higher interest rate (typically 0.50% to 1.5% above rates for conforming loans), and private banks may be reticent to make large loans because their capital requirements are higher than GSEs like Fannie and Freddy. The likely effect for borrowers is to make credit more expensive and harder to get.

It would also be likely to cause home values to drop even further, which is bad news for sellers. According to the Oakland Tribune, over a quarter of all Bay Area homes are already underwater; if demand is decreased even further, it will be hard for the real estate market to make a recovery.

Leithliter also warns that many banks that use Fannie and Freddy to back mortgages may implement the $625,500 limit prior to the October 1st deadline, in order to process the last of their higher jumbo loans in time to qualify for the current financing rates.

“The signs are pointing to a tightening of the credit market in the near future,” says Leithliter. “Buyers who continue to wait around may come to wish they had acted sooner.”

For more information about the upcoming lowering of conforming loan limit and its impact on the market, or any of Eric Leithliter’s products or services, call him at 415-692-7415 or view him on the web at www.calmtg-ba.com. Connect with Eric Leithliter on Facebook at www.facebook.com/pages/Bay-Area-Mortgage-Guide/160527848509 and follow him on Twitter at http://twitter.com/mortgagecounsel.

About Eric J. Leithliter, California Mortgage Advisors, Inc.

Eric J. Leithliter is a Senior Residential Loan Officer at California Mortgage Advisors, Inc. He is focused on providing his clients education on the current financial market conditions and how this effects their mortgage options today and in the future. He began as a loan processor and underwriter and became an expert in all facets of the lending industry. As a Loan Officer, this background helps Liethliter construct complicated and difficult loans into successful loan closings. He continues to attend underwriting seminars that keep him abreast of all the changing requirements that lenders are implementing in today’s complex lending environment. Leithliter specializes in residential financing, private money financing, commercial financing, short sale and foreclosure transactions, FHA loans, credit analysis and repair, and jumbo mortgage loans in the Bay Area.

Eric J. Leithliter serves the San Francisco Bay Area communities of Walnut Creek, Orinda, Lafayette, Moraga, Alamo, Danville, as well as Marin County, San Francisco, Silicon Valley, and Sonoma County.

###

For the original version on PRWeb visit: www.prweb.com/releases/prwebJumbo-Mortgage-Loan/Bay-Area/prweb8560737.htm

Article source: http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2011/06/10/prweb8560737.DTL

As expected, the fight over the fate of Fannie Mae and Freddie Mac is now heating up on Capitol Hill.

Later today House Republicans are expected to introduce a bill from GOP Conference Chairman Jeb Hensarling that would wind down the two government sponsored entities in five years.

Hensarling and other Republicans not that the Congressional Budget Office has estimated the GSE’s will cost taxpayers $389 billion over ten years.

They’ve already inhaled $150 billion in taxpayer dollars.

The bill, backed by House Financial Services Committee Chairman Spencer Bachus, is similar to bills introduced in 2008 and 210; the difference now of course is the new House Republican majority.

Aides familiar with the bill say it would put an end date to the GSE’s conservatorship two years from the date of enactment.

It would repeal the GSE’s affordable housing goals mandate, shrink their size by capping the maximum portfolio size at $700 billion and then gradually reduce to $250 billion over five years. It would also return the conforming loan limit to $417,000.

That last one is particularly important to think about as we struggle through this Spring market and try to call it a “recovery.” Credit is still one of the biggest barriers to recovery today, and the private market for jumbo loans is thin at best.

I want to share some insight from FBR’s Paul Miller:

Page 1 of 2 | Next Page
Show Entire Article

Saudi King’s Speech Friday Could Move Oil Markets

UN Security Council Approves No-Fly Zone Over Libya

Banks Await Test Scores; Investors Wait for Dividends

Japan’s Nuclear Crisis: How It Spun Out of Control

Global Tumult Sends Many Investors Back to Sidelines

More Top Stories

Article source: http://www.cnbc.com/id/42132670?__source=RSS*blog*&par=RSS