California South Bay Blogs

The feds cutting interest rates can mean only one thing: mortgage lenders are jumping at the opportunity to persuade you to refinance your loan!

There’s just one catch: if you happen to be a responsible and conscientious borrower who locked in a jumbo loan at a 30-year fixed rate mortgage, your rates are probably better than what is being offered right now on the market.

At least, that’s what I’ve found: our jumbo loan 30 year fixed rate is 6.0% and as of today, most of the interest rates for jumbo loans hover in the low 6% but generally above 6.0%. I’ve seen some as high as over 7%! It is the non-jumbo 30 year fixed rate mortgages that have the attractive high 5% rates.

Unless you’ve lived in California for decades or traded “up” a house using the equity of your first house during the housing boom, you’re likely to be paying a jumbo mortgage, which is a loan exceeding $417,000.

We got an email blast from Countrywide’s President, and it made me wonder whether Countrywide is worried about its customers leaving in droves due to recent concerns about the company’s wellbeing:

Dear Countrywide Homeowner,

As the mortgage and housing industry goes through unprecedented changes, Countrywide has been taking swift steps to help ensure that our customers won’t be impacted – and that we maintain our position as America’s #1 home loan lender.

With millions of current customers, no one is more committed to the dream of homeownership than Countrywide. And we continue to place an enormous value on customers like you.

As your home financing partner, we pledge to:
•Make sure you always know your mortgage options, and provide you with the information you need to make the best decisions.
•Tell you about opportunities to improve your home financing position, such as lowering your rate or payments.
•Make sure the loan process is always simple, honest, and straightforward, and that you know all terms and fees upfront.

I want to thank you for letting us serve your home financing needs, and assure you that your continued satisfaction will always remain our #1 priority.

Sincerely,
Andrew Gissinger III
President and Chief Operating Officer
Countrywide Home Loans, Inc.

New York Times today covered a story on the myriad of fees that are hitting people who can afford it least – people who are struggling to pay their increasing mortgage or are foreclosing on their homes. In Dubious Fees Hit Borrowers in Foreclosures, 7.5% of CountryWide’s service revenues came from late fees – almost $300 million worth:

But these are not the only charges borrowers face. Others include $145 in something called “demand fees,” $137 in overnight delivery fees, fax fees of $50 and payoff statement charges of $60. Property inspection fees can be levied every month or so, and fees can be imposed every two months to cover assessments of a home’s worth.

It goes to show that when revenues are being squeezed in one area (tougher lending environment), lenders will find other ways to make money, and in situations where regulation is lax, some of these lenders’ business practices can make worse a home owner’s nightmare.