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California Mortgage Rates

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                 Low interest rates likely to continue through 2007

                  January – March, 2007 best time to buy a home

    Resurgence of fixed rate loans as solution for homeowners seeking to
            escape interest-only or adjustable rate mortgages

    High housing prices continue to force new buyers to alternative loans

CAMB issued its annual Mortgage Forecast projecting that interest rates will remain
favorable in 2007 with the rates likely to remain within one percent (1%) of current low
levels. Additionally, recent homebuyers (within the last several years) who used an
interest-only or adjustable rate mortgage are turning to fixed rate loans as they refinance
and take advantage of equity. However, despite the recent stabilization of the housing
market, many new buyers are still forced into alternative loan products due to high housing
prices. Finally, for home shoppers, the first half of 2007 is likely to be the best time to get
a good deal on a new or existing home.

 “Interest rates will remain extremely favorable to borrowers in 2007,” said Jack Williams,
president of the California Association of Mortgage Brokers. “Fixed rate loans are making
a comeback for those who are refinancing while alternative loan products are likely to
remain popular because of high housing costs. It is important for consumers to make sure
they understand how the various loan programs work to ensure that the loan program they
select meets their financial objective or fits their own unique needs.”

Four hundred members took part in CAMB’s fifth annual survey during the months of
October and November of 2006. Survey highlights include the following:
   •   Thirty-six (36) percent of members believe that interest rates will rise by less
       than one percent while 29 percent believe they will stay the same. Others (26
       percent) felt rates will decrease by less than one point, while another 7 percent felt
       rates will rise by more than one point, and 2 percent felt rates would decrease by
       more than one point.
   •   Thirty-eight (38) percent of members believe that home prices will decrease
       slightly (less than five percent), while 26 percent believe there will be a slight
       increase (up to five percent). Other projections included a significant decrease (19
       percent), no change (12 percent), a significant increase (2 percent), or other options
       (3 percent).
   •   Twenty-nine (29) percent of members believe that the prime fixed rate loan
       will be the most popular in 2007, primarily due to refinancing by recent buyers
       who are seeking to capitalize on recent appreciation and escape alternative
       loans. Other popular loans included the interest-only loan (25 percent), prime
       adjustable loan (23 percent), the hybrid adjustable (15 percent), and the non prime
       loan (8 percent).
   •   However, 36 percent of those surveyed feel that the interest-only loan will be
       the most viable product for consumers due to the continuation of high housing
       costs in the state. According to the forecast, other viable mortgage products will
       include hybrid ARMs (21 percent), traditional fixed rate loans (20 percent), option
       ARMs (5 percent) and the extended fixed rate mortgages (18 percent), which
       include the 40-year and 50-year loan.
   •   Thirty-five (35) percent of those surveyed believe that January through March
       will be the best time of the year to purchase a home, while 31 percent project
       that April through June will be the best time. 17 percent felt July through
       September is a good time while another 17 percent believe that October through
       December is better.
“The first six months of 2007 will probably be the ideal time for consumers to purchase a
home,” said Williams. “During that period, there will be fewer buyers, more housing
inventory, low interest rates, and more motivated sellers. It is important for consumers to
be aware of these factors, and to be sure they are working with a qualified broker who will
be putting them in the best loan to fit their circumstances.”

Consumers with mortgage questions are encouraged to contact CAMB’s toll-free consumer
information hotline at 1-800-253-2262 to be connected with a local member or visit the
Web site at