Rates dropping on ‘junior jumbo’ mortgages

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The L.A. Times today reports that rates for the newly created ‘junior jumbo’ category of mortgages -- loans in the $417,000 to $729,000 range -- have come down over the last five weeks.

The chart at right shows most of the story, but here’s more. ‘Rates on conforming jumbos began declining in May after Fannie said it would buy the loans for its own portfolio -- instead of trying to sell them to investors. It also said it would buy them at interest rates that were on par with smaller conforming loans, although it charges lenders higher fees on the bigger mortgages.

More: ‘Rates on 30-year fixed-rate conforming jumbos averaged 6.39% last week, just 0.14 of a percentage point above the 6.25% for conforming loans of less than $417,000, according to HSH.’

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