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Rates are down today. Today’s comparison mortgage rates with no lender fees are 3.875 % on a 30 year, 3.125% on a 15 year and 2.875% on a 10 year. (click here for details)

So today’s topic is lender loan level pricing by state. Did you ever wonder why there isn’t just one rate for all states? Why is it that rates in Michigan are worse than Texas? Is it because they have smoking hot cheerleaders? I like to think so. But I doubt it.

Check out today’s video:

Here is the real reason why some lenders have better pricing in some states than others. It really comes down to profits. Big shocker right?

Some states just have better SRP’s or service release premiums due to the lower default ratios and the costs to service those loans end up being a lot less. Now another variable that you don’t hear much about is lender appetite.

Lenders always price more aggressively for the types of loans they want on their books. This includes the state the loans are in. Because Texas has such a low default rate and has held values better than most states the loans made in Texas are considered less risky and therefore less expensive to service.

That makes sense, right? But why do they have a less default rate then let’s say Michigan?

Well – Texas is the ONLY state that has its own very strict cash-out rules. The saying in Texas is – “You can put your boots in the oven, but that doesn’t make them biscuits.” Oh, wait. What I meant was once a cash-out, always a cash-out.

So by doing this, they actually reduced the amount of people pulling out massive amounts of equity in their homes over the past years. So when housing values fell, Texas homeowners just had more of a cushion than the rest of the country. Nice job, Texas!

OK – It’s Follow Friday again for you Twitter fans! Check out these three crazy Twitter fanatics and show them some Twitter love!

Ken Blevins (REO Expert)

D Magazine (Dallas Magazine)

Michael Tritthart (Nationwide Trainer/Consultant for Real Estate Agents)

If you thought this was good information or worth discussing, help me bring transparency to mortgage lending by sharing today’s episode on Facebook or Twitter.

Let’s change the way people shop for a mortgageā€¦forever!

– Mike

PS. To ask a question, get advice, or find out if you’re getting the best deal possible on your loan, just post a comment below. Daily comparison rates, calculators, and other cool features are available in the free Rates in Motion LoanApp by going to your smart phone and clicking on this link, activation code is 9203780002

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