Friday, April 17, 2009

Rates Ease, Pipelines Clog

In its Primary Market Survey, Freddie Mac reports that 30 year fixed rates eased back down for the week ending April 16.  We slid down to 4.82% with 0.6 point origination from 4.87 the week before.  For comparison’s sake, one year ago the rate was 5.88%.

Meanwhile, bank pipelines continue to fill up as tens of thousands take advantage of this historic opportunity.  Underwriting turn times have slowed to crawl.  Banks that a few months ago had 2-day waits for underwriting are now 9-10 business days out.  Conditions and stipulations are at least 48 hours per cycle, in many cases 4 days.

The Right of Recission steals up to six days from a 30-day lock.  If a refinance closes on a Tuesday, it can’t fund until the following Monday, because Saturday can’t be a funding day.  So mortgage brokers and bankers have to plan on being able to do a loan in 3 weeks if they want to make a 30-day lock.

That’s become almost impossible unless you have a full package ready to go when you make your lock.  That means having an appraisal, all signed documents and supporting income and assets ready to submit to underwriting.

For that reason, our company Crown Mortgage Services now prefers to take only 45-day locks on refinance loans without a full package ready.

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