Mortgage Industry Updates.

Yes, the Fed cut the rate again on Oct 31.

Here is the brief summary for this industry:

1)The rate cut will eventually lower for the short
term ARM rates, especially 3/1ARM and 5/1ARM.
But how lower those ARM rates can go depends on
the lender\'s financial performance and overall
economy.

2)Conforming Loan Limit:
The overall conforming loan limit will not go
lower(will be announced later Nov or Beginning Dec).
Though California Congressman and Governmenor
proposed to the Congress for 625k limit, it\'s
unlikely to be approved by Fed and Bush
Administration in the near future.

3)Sated Income Loans:
It\'s very hard to get approved unless you have
very strong assets and/or lower LTV(loan to
value ratio).

4)2nd Loans Market:
It\'s hard to get loans approved with lower
than 10% down payment(especially for Jumbo Loans).
And with National City Equity closed the door
(merged with first loan wholesale),
Bank of America exit the whole market and Citi
HELOC exit the purchase 2nd, the borrowers have
limited options for 2nd Loans now. But you can
still get good rates from the Credit Union,
or bank retail channel(like BOA retail).

5)Interest Only Loans:
Starting Feb 2008, all interest only loans will
be qualified as fully-index(the current qualification
rate will be around 7.5%).

6)Lender\'s DTI(Debt to Income Ratio) requirement.
Though you can still find some lender with DTI
of 55%, most lenders require 45% or lower now,
especially if you want to get lower rate.

7)ARM Qualification.
More and more lenders will use fully-indexed
rate(around 7.5%) to qualify the loans with
1yr, 2yr, 3yr fixed programs.

8)If you have 2.5% APR loans, be prepared for
more questions from the new lender at next
refinance. Some lenders will ask
you to explain the purpose of that refinance.