Congress passed the new stimulus plan put forth by President Bush, which allows Fannie and Freddie to buy loans up to $729,750 in Metropolitan Areas where this number represents 150% of the median priced home.

We still don't have a definitive on date and actual pricing -- probably 25-35 days out. Sources are saying that this particular "conforming" pricing may not be exact to what we are seeing at the $417,000 conforming level. Even if it isn't exact, it will most likely be an improvement of .50 - .75% vs. non conforming pricing today. It appears this elevated conforming limit will be in place until the end of 2008 -- so we will probably have a 8-9 month window to capitalize on this new limit.

To give you a baseline of comparison:

Wells Fargo Conforming Par Pricing Today
6.00% for a 30yr Fixed; 5.25% for a 5/1 ARM

Wells Fargo Non Conforming Par Pricing Today
7.125% for a 30yr Fixed; 6.75% for a 5/1 ARM

*** This is Full Doc pricing

This should illustrate the discrepancy that has been priced into the market and why there is a lot of buzz around the new conforming loan limits. The secondary market is still apprehensive about jumbo loans, which is why they are being priced accordingly -- the investors are demanding a healthy yield.

If you owe less than $850,000 on your 1st and 2nd loan, contact us today and we can review your profile to determine if this new pricing makes sense given your particular situation.

Respectfully,

Best Regards,
Britt Miller, Vice President
Steelhead Capital