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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: russwinter who wrote (24846)	1/18/2005 9:45:30 AM
From: C.N.S.	Read Replies (2) \| Respond to of 110194

Russ, This is a just a partial answer to the questions you posed (and only two anecdotes at that). (1) Many wholesale lenders are currently adding YSP (Yield Spread Premium - the backend fee) recapture clauses in their contracts with mortgage brokers by which the broker has to refund the entire YSP if the loan is refinanced in one year or less (some wholesale lenders specify 6 months). The mortgage broker community is especially incensed because these clauses are in effect even if the churning is not the result of the broker or the lender (ie even if a different mortgage company is involved with the customer). (2) Also, I can point to anecdotes by brokers that mention about how entire departments at some of their wholesale lenders have a "lot of time on their hands" (much better customer service & individual attention which wasn't there earlier).

To: russwinter who wrote (24846)	1/18/2005 5:10:50 PM
From: loantech	Read Replies (1) \| Respond to of 110194

Russ rates are between 4.75% and 5.125% for 3/1 and 5/1 ARMS. Most buyers are opting for the 3/1 ARM is they get the ARMS. Not a lot of refi activity at this time. As far as teasers go lenders are not doing loss leaders so to speak where they lose on the start rate to generate business. They may not make as much on the back end but are not usually subsidizing anything. I am with you if we see rates go up a point they cannot switch to a longer term fixed except for an even higher rate and if short term rates move up there is not much difference at this time between the 3 or 5's. I don't hear that much about layoffs yet. A lot of lenders run a lot more lean than some think they do, pay overtime etc. so they do not hire up so much in a hot refi market so they do not have to layoff when the refi's cool. Would not be surprised though to see layoffs coming up as business seems to have slowed. But as you know Portland is still a bubble market. I saw an article in the paper over the weekend where the realtors are claiming a lack of inventory. Over the last 30 years though I have seen this market turn on a dime several times and it is usually to the downside of activity and price when it happens. tom