Are we stimulated enough yet? Wow, what a week. With the rate cut and the announcement of the President's $150,000 billion dollar economic stimulus package, the mortgage office has a buzz that has been absent for months.

The phones are ringing off the hook with homeowners and potential homeowners asking what these latest developments mean to them.

One thing is for sure: Those bare trees outside that are leafless are not dead. You can scratch the bark and see green underneath. Dormant and dead may look the same on the outside, but there's a big difference.

I think I see a little green, even though its still stormy outside.

The absolute biggest news for California is the possibility of increasing the conforming loan limit from the current $417,000 to over $700,000, as proposed in the economic stimulus package. This would be applicable only to higher priced housing markets, and be in effect until the end of December.

This will unleash a vast number of California buyers who either could not or would not pay the much higher rates for jumbo loans.

Currently, jumbo loans carry a far higher rate because lenders are unable to sell these loans to Fannie Mae and Freddie Mac.

Our old formula of getting around these limits was a first mortgage of $417,000 and a second mortgage to make up the difference.

This has nearly disappeared as lenders of equitylines and second mortgages have either exited the market, or enacted guidelines too strict for qualification.

Without second loans to bridge the way from the $417,000 to the loan amount, a jumbo loan has been the only ticket in town. Can you see why borrowers might wonder why they must pay near 7% when over in the lower priced part of town, people are paying 5.75%?

OUCH.  Buyers balk. Those that need to refinance wait, frustrated. Higher priced homes sit unsold.

How will the ability to take advantage of  the new higher conforming limits STIMULATE Calfornia and who stands to take advantage?

1. Calling all holders of adjustable rate mortgages!!!! Now is the time to grab a 30 year fixed rate, even if your loan will not re-set right away. Opportunity is knocking.
2. Calling all buyers who need a jumbo loan!!! Call your real estate agent and your mortgage broker now. You have just been handed a gift.
3. Calling all holders of large equitylines! Now is the time to get rid of the high rate by refinancing and blending that rate into your first.
4. Calling all sellers of high end properties...get your house ready now. Buyers will appear.
5. Calling all holders of mortgages over 6%. You need to consider refinancing.

Is there a fly in the ointment? Well, yes. We continue to struggle with declining values and strict guidelines. You may not be able to refinance because your home has lost value. You may not be able to qualify because these days it is much more difficult.

But the potential for home values to increase is lurking.

Get ahead of the curve and you can nab a cheap house and a great loan before the rush hits.