Freddie Mac and Fannie Mae get a much needed boost to their portfolio limits caps. Their new limits will be raised to $735 Billion. In addition, they will also be allowed to grow .5% per quarter or 2% per year. With Fannie Mae and Freddie Mac the current saviors of the Mortgage Market these increases should help tremendously!
In a related post by Aaron Gordon, regarding Fannie Mae Portfolio Limits he posed the question, What happens when Fannie reaches their limit? Aaron and I have been watching to see if anyone had an answer. To date no one has had an answer.
That being said these new limits will hopefully keep us from having to find out the answer to that question for the time being. See related story from thehousingwire.com:
- OFHEO Gives GSEs More Breathing Room on Portfolio Caps by thehousingwire.com September 19, 2007
- Today the Office of Federal Housing Enterprise Oversight said it will change how it calculates the portfolio capsin place for each of the GSEs, as well as looking to bring Fannie Mae into parity with Freddie Mac regarding annual portfolio increases.
- From the Wall Street Journal, a quick summary:
- In May 2006, Ofheo capped Fannie Mae's portfolio at $727 billion because of the company's past accounting problems. But Ofheo's new policy would allow Fannie Maeto grow its portfolio 0.5% per quarter, or no more than 2% in one year. Ofheo has a similar growth structure agreement in place with Freddie Mac, which like Fannie Mae is a government-sponsored enterprise.
- Ofheo said it will set the portfolio cap for both companies at $735 billion, effective July 1, 2007. Both companies will be allowed to grow 2% annually from this level beginning in the fourth quarter. In the fourth quarter, they will be allowed to grow 1.0%, though Ofheo said the 2% annual cap would remain.
Your mortgage partner for life,
Rey "Steak Dinner" Gallegos
Senior Loan OfficerFive Star Mortgage
Website: http://www.steak-dinner.com/Your complete community mortgage broker Approved in NV, CA, UT, NM, AK, and FL
Proud member National Association of Mortgage Brokers
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So Rey,
Do you think we will get another 1/2 % in October or November? What is your prediction?
Karen Monsour, Realtor, Fort Lauderdale, Fl 954-464-4194