Despite the bumpy ride, rates didn’t change much this week. According to Freddie Mac’s weekly survey, the 30 year conforming fixed rate ended the week at 5.65% with half a point. This of course is the owner occupied rate with the highest credit scores. Investors, or those with lower scores pay more.

The big news of course was the Senate passing the economic stimulus package containing the increased conforming loan limits, which now moves on to the President’s desk for signature next week. I contacted a number of banks to ask how quickly they would act on the new law, but of course they’re still figuring that out.

Further Thoughts on the Conforming Loan Increase

One of my associates pointed out that language in the conforming loan limits provision suggests that the increase would apply only to “high cost” areas. Although FHA loan limits vary by county, conforming loans limits have been pretty consistent across the country. I couldn’t find any further detail, so I emailed Barbara Boxer yesterday in hopes of clarification. Seems to me that the benefit would be minimal unless the new limit is broadly applied.

I was also curious about whether we would see a rate “adjustment” for what the larger conforming loans. Again, no clear response from the banks. But interestingly, Freddie Mac intends to keep that part of the portfolio separate from the sub $417k part.

This from Reuters…

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