Interview With Eduardo Umansky From Countrywide

Let's face it- times are confusing. I feel that we are constantly being fed mixed-messages regarding what's happening on the housing and mortgage fronts. Even as a real estate professional myself, I often need help gaining some insight as to what is REALLY happening out there, which is why I look to people like Eduardo Umansky from Countrywide Home Loans. Eduardo is experienced, intelligent, and, as I can tell you from past experience doing deals with him- he can make even the toughest loans happen. I recently asked Eduardo a few questions that I thought might offer a little perspective into this mortgage headache so many people are having. Fannie Mae just announced last week that it would begin accepting applications for Fixed Rate Mortgages starting April 1st for the new Jumbo loan limits, and May 1st for all Adjustable Rate Mortgage applications. Below, Eduardo gives us some further insight into the changes being made.

1. With the Fed funds rate cuts, why are the home loans not affected or increasing? Will the spreads continue to grow and is there anything to stop this current trend?
Fed controls liquidity and short term interest rates, such as overnight bank loans and prime rate. The influence on mortgage rates is not very significant.

2. My friend’s home equity loan has been unaffected by the Fed rate cuts- I thought the cuts would have a positive affect.
It will be affected if based on PRIME RATE changes. Those changes will appear on next month's statement.

3. When will we know the rates for the new limits that have gone into effect? I hear they will be slightly higher than the 417,000 conforming rate.
New limits for FHA are $729K for Single Family Residences, $934K for 2-unit dwellings, $1,129K for 3-unit dwellings and$1,403K for 4-units. Rates will be implemented by March 19th, 2008, or possibly earlier. Slightly higher loan limits will also be available with Government Guaranty. (Conforming loans)

4. What is the correct name for this new increased rate- is it still called a conforming loan? Yes- "conforming loan limits."

5. If I had a buyer today, could you get me this loan?
Yes, I can lock a loan and change it when actual rates are available on 3/19. The rate of the loan will be the rate of the day of the transfer.

6. What are the guidelines for this sort of loan, excluding area, that may differ from the original conforming loan restrictions?
Loans must be FULL DOC- i.e. full documentation. The FHA might also require two appraisals as opposed to the usual one.

7. Do you think this will help in the near future (next 3 months) enough that we will see some better housing data in areas with those increased limits?
This, unfortunately, will not affect foreclosures. It will help by increasing liquidity for purchases and refinances. I don't think it will have a "quick" effect in the housing market.