CitiMortgage Slashes Interest Rates on Jumbo Mortgages

CitiMortgage — the mortgage finance arm of Citigroup (C) — today lowered its jumbo mortgage rates “for highly credit worthy borrowers” according to an e-mailed statement. Jumbo mortgages typically fall above the $417,000 conforming loan limits. As of today, Citi will offer 30-year fixed-rate jumbo mortgages at 5.625%. It will also offer five-year adjustable-rate mortgages at 4.875%. Recent jumbo rates regularly top 6%. The move is part of a push for a greater presence in jumbo mortgage lending as the market looks set to take off with revived securitization. “We are beginning to see a lot of interest in the jumbo market,” CitiMortgage CEO Sanjiv Das told Reuters last week. “We want to demonstrate that Citi is a leader in jumbo mortgages and we believe that end of the market has been underserved.” Citi’s lowered jumbo rates come as the market for jumbo mortgage securitization is beginning to thaw. Redwood Trust (RWT) last week closed a $237.8m prime jumbo residential mortgage-backed security (RMBS) — the first private-label deal in the US since 2008. Moody’s Investors Service assigned the deal triple-A status, despite warnings of inherent risk factors. Moody’s on Friday adjusted ratings on $11.5bn of jumbo RMBS as its loss expectations on pools of jumbo loans issued from 2005 to 2008 continues to evolve. Write to Diana Golobay. Disclosure: the author holds no relevant investments.

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