I’m joking!

Interesting set of data released by Jack Guttentag, the self-proclaimed “Mortgage Professor” shows that mortgage loan rates for the best-rated borrowers haven’t gone up during the past three months.

For the typical borrower, however, rates have increased, and may be going higher.

Basically, he looked at rates in early May, and compared them to rates today (actually, as of August 3rd). (His data is not all-inclusive, but gives a general idea of what is going on.)

On “cream-puff” loans, interest rates rose by about .4 percent between May 4 and Aug. 3. On some programs it was a little more, on others a little less, but the dispersion was small.

(A cream-puff loan is one with a 20 percent down payment on a $500,000 single-family home purchased as a permanent residence, by a borrower with a credit score of 720 or more, who fully documents income and assets, and escrows taxes and insurance.)

However, those looking for loans who had lower credit scores were paying substantially more than they were, just three months’ ago.

On scores ranging down to 680, rates on Aug. 3 were about .4 percent higher, but at 660 the increase was .56 percent and at 620 it was 1.4 percent. Below 620, there were no quotes on either date, that’s subprime territory.

I also looked at rates on loans of different sizes on May 4: the sizes were $75,000, $417,000, $418,000 and $2 million. The two middle sizes distinguish loans that can and loans that cannot be purchased by the two federal agencies, Fannie Mae and Freddie Mac. The rate increases, starting with the $75,000 loans, were .41 percent, .45 percent, .74 percent and .8 percent.

Basically, no surprises. Those who are more at risk of defaulting will have to pay more, now.

But, Professor Mortgage says there is no sign of a “mortgage meltdown”. Those who want to borrow, still can.

More: Is mortgage market veering toward meltdown? – By Jack Guttentag, Inman News

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Updated: 1st Q 2018

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