The Veridian Blog

I am refraining from reporting any economic news from last week because there was nothing that could stem the tide of the impact of most major lenders FINALLY lowering their Jumbo-Conforming rates by as much as 0.75% overnight. What we had been suspecting all year as a micro-economic pricing play turned out to be true. Since mid-March when the temporary Jumbo-Conforming loans were released, there has been widespread disappointment in the jaw-dropping premiums placed on these middle-tier programs.  For no apparent substantive economic reason, what was once lauded as an extension of the traditional Fannie Mae conforming program became a distinct 3rd tier of rates between traditional Jumbo and Conforming (thus the completely uncreative term "Jumbo-Conforming").  Our brain trust concluded that investors could care less what the inflation and treasury numbers showed.  The crux of the issue was simply their fear of the illiquid markets which in turn, caused a shortage of buyers for mortgage products. 

Many frustrated homeowners had no choice but to sit on the sidelines to wait for a brighter day. That day came on Thursday morning as rates followed a steeper descent into Friday. I don’t have the numbers yet, but the major banks likely reported $300-400 million in loan origination locks during the 24-48 hour time span. Hopefully, the trend will hold up or even improve… meanwhile, see the attached super-stellar no-cost rates!

This week does bring solid economic reports by way of Retail Sales and CPI. If you’re in the area, please visit our booth this Saturday at the 3^rd Annual Spring Fling Community Festival. For more details, see www.dcsco.org/springfling/