For the week of September 2, 2008

*Estimated rates:

30 yr fixed conforming                                   6.125 - 6.250

30 yr jumbo                                                  6.625 to $600k

7/1 ARM                                                       5.750 - 5.875      

OR VA                                                          5.500

State Bond FHA                                              6.000

Rates are holding steady. Every day they are up a little or down a little with no real change from week to week. We have been in this range for quite some time  and there is nothing expected to change things. The minutes from the Fed's last meeting showed that they still wanted to raise rates because of inflation pressures but weren't going to due to the uncertainty in the economy. That uncertainty hasn't vanished but the issue about inflation might be partially resolving itself. Commodity prices have dropped substantially, especially that of oil. The price of a barrel of oil has come down about 25%. Gasoline hasn't dropped near that amount but we have seen it come down. And, hopefully, we will still see further declines at the pump. There hasn't been any wage inflation to speak of so we might see some weaker inflation numbers going into fall and winter. That should keep the Fed from making any moves through the end of this year.

There has been a lot of talk in the market about failing banks and whether Fannie Mae and Freddie Mac will survive. This creates some of the uncertainty that I referred to above. Fannie and Freddie will survive. The question is one of whether their stock holders will or not. Seems like the consensus is that the government will have to inject a lot of capital into the firms and, most likely, will wipe out the stockholder's equity. Everyone agrees, though, that they have to survive to keep the mortgage market alive. It's the 'too big to fail' syndrome being played out again. As for the banks going under, there will be many who get hurt by the failures but the failures shouldn't impact the overall market in general. Those depositors with concerns about FDIC insurance should do some research. An excellent tool to help calculate the amount of FDIC insurance on your accounts can be found at http://www4.fdic.gov/EDIE/ 

The change in fees charged by Fannie and Freddie have taken place. There will be no increase on loans at 60% or less of the value/sales price of the property. There is a new grid that we need to review to quote a rate today. That grid has seven different credit scores and eight different loan-to-values. So having a rate quote isn't as easy as it may seem. Everything now depends on credit score and down payment. The interest rate range I show above is usually for those with good scores....above 720. If the scores are lower, the rate could be substantially higher. Again, those rates above are really just to inform you of what the overall rate trend is.

Hope you all had a great Labor Day!

Bob Chiodo,

Equity Home Mortgage, LLC

12550 SW 68th Parkway

Portland, OR 97223

(503)670-7393

fax: (503)670-7062

bobchiodo@equityhome.com

www.ResCommLending.com

*Rates quoted are for the use of Realtors and others in the real estate/financial service industries. They are not meant to be a quote for an individual situation. Rates change daily and those above are only listed to assist market participants by keeping them informed of current interest rates.  Quotes are usually shown for a 30 day lock period and a 1% origination or discount fee.