• 1.5 Trillion in 3 & 5 Year ARMS Resetting in 2007

According to the Mortgage Bankers Association, close to $1.5 trillion in adjustable-rate-mortgages are due to have their rates reset this year. Now that it looks like the Fed will not lower interest rates anytime soon, these already-stretched home-owners/borrowers will soon see the 3 & 5 year fixed intermediate ARM loans (they took out during the real estate boom years of 2002-2005) significantly adjust upward in rate. For many, there will be few options available.

Although increased foreclosures and defaults are already being reported in the press, so far most local markets like ours in Marin and Sonoma have been reabsorbing foreclosed homes without too much material effect. However, 2007 will be the first real year that intermediate ARM resets will be taking place and with values down and rates up, many analysts are worried that we as retail loan originators will have no way to help many borrowers, especially in certain speculative markets.

• Bank of America tests new marketing strategy.

Last week’s news that Bank of America may enter into a joint venture with Countrywide forced many people to miss, what for many in the banking industry, is an even bigger story.

The Associated Press reports that since September 2006, Bank of America has been testing a brand new loan marketing strategy. Washington State borrowers are being offered “no-fee” mortgages to the public. The bank covers the usual closing costs and eliminates the retail origination fee – basically offering wholesale pricing to the public (yeah, I know what you’re thinking). No word on whether they plan to roll the program out nationally. Stay Tuned....