Great News!
Great news everyone!Great news as the House and Senate pass increases in conforming loan limits! The measure now moves to the President’s desk for signature and approval. Which is expected next week.Once singed, California conforming loan limit could increase from $417,000 of $729,750. However, it may take months for lenders to gear up to have the underwriting limits in place. Also important it that it allows the government to buy loans in that range that were originated as far back as July of 2007, allowing lenders to get those stagnant loans off their books and sold to government sources. A huge boost for market liquidity!Remember, conforming loan rates are as much as 1.0% or better than Jumbo loan rates, a huge boon to our potential buyers as well as the refinance market!For example once the new limits are in place, a $900,000 purchase with 20% down payment is a conforming loan of $720,000. This is a huge stimulus to our low to middle market that is bound to trickle up to higher end purchases as well.Three important excerpts from the Inman news report as follows. Quote:Bush administration officials renewed their calls for Congress to pass legislation tightening oversight of Fannie Mae and Freddie Mac Thursday, as Congress signed off on a plan to allow the companies to guarantee or purchase loans that exceed the $417,000 loan limit.The increase, to as much as $729,750 in high-cost areas, will also apply to Federal Housing Administration loan guarantee programs. Because the increase will be capped at 125 percent of the median home price for an area, the conforming loan limit will remain at $417,000 in markets where the median home price is $333,600 or less.James Lockhart, director of the Office of Federal Housing Enterprise Oversight, said underwriting the larger loans will require new models and systems, which could take months to put in place. As Fannie and Freddie get set to venture into what is now jumbo loan territory, Congress must act quickly to ensure they don’t put themselves — and the entire financial system — in jeopardy, Lockhart said. Unquote: Stayed tuned for more news as the lenders gear up and we start accepting loans at these higher limits. I’ve attached a PDF of a full article from Inman News or you can go to the link directly here http://www.inman.com/inmannews.aspx?ID=66047
February 08 2008 05:17 pm | Lending Info