Mortgage information and advice from a St. Louis Mortgage Banker – Part 3 of a series

Dennis Norman

Dennis Norman

By: Dennis Norman

Today we pick up where we left off yesterday with my E-View TM with respected mortgage banker, H. John Frank, President of Paramount Mortgage Co. here in St. Louis.

If you missed part one or two, there are links to both at the end of this post. And now, part three of the E-View TM:

Q-I have seen a lot of reports about “jumbo” loans and rates being artificially high on those loans. What is a “jumbo” loan and have the rates been affected in a negative way as a result of the mortgage mess?

H. John Frank, Jr., President, Paramount Mortgage Co.

H. John Frank, Jr., President, Paramount Mortgage Co.

A- Jumbo loans are ones that exceed the FNMA (Fannie Mae) loan limit. In most states, this limit is $417,000. There are fewer and fewer investors who make these loans because they are not as marketable (investors can always sell their ‘conforming’ loans to Fannie Mae or Freddie Mac if they need to raise funds). Without this constant outlet, the liquidity of these loans is diminished, thus demanding a higher yield for the product.

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