The Mortgage Meltdown- spells savings for many.  We have all seen it on the news and read about it in just about any newspaper you pick up.  It is "The Mortgage Meltdown" and unless you have been living under a rock you know it is ever present in today's financial world.

By all news accounts the sky is falling and the end is near in the housing market.   This is a sad reality for many Americans who took out risky loan products during the "boom".

For many Americans, though,  the meltdown may have a much more positive effect, an effect that will come in the form of savings.  President Bush signed  the Stimulus Bill today (Wednesday 2/12/08).  There are several pieces to this legislation and this article will focus on the mortgage portion that will allow millions of Americans to refinance their current mortgage and save thousands of dollars in interest. 

The package temporarily raises the maximum size of mortgages that government-sponsored lending companies Fannie Mae and Freddie Mac can purchase and market as securities, from $417,000 to as high as $729,750 in expensive parts of the country such as New York and California.

The Bill will also make very similar changes to FHA loans.  FHA loans are government insured loans to borrowers with lower credit profiles.

This legislation will allow for people who have taken out Jumbo loans or very expensive 80/20 loans over the last five years to be able to refinance into one 30 year fixed loan within the conforming loan limits.   The rates on these loans will be anywhere from 1-3% below what the borrowers are currently paying, meaning huge savings every month on the mortgage payment.   The FHA portion will allow for those with less than perfect credit to take advantage of these new limits as well.   The First time homebuyer will also benefit from the higher limits, especially in the higher cost housing markets.  

You won't want to wait around to see if rates drop again and play the gambling game with the market, though,   these increased limits are only proposed through the end of 2008.   This means a 4 to 6 month window of opportunity that could be gone forever, if it is not voted as a permanent change.

Even though the President has given the final ok, it is likely to be several months before we see the actual increases.    The industry analysts will need to study the long term effects of loans and default rates above the current 417,000 conforming limit.  The investors will also need to come up with a plan of how to package these loans for sale on the secondary markets.   

With the anticipation of this Bill and the record low interest rates, we have already seen an increase in purchase contracts and refinance applications in our area. 

People are already starting to line up to get their application in for when these new limits officially take effect.   I encourage you to contact us now if you want to take advantage of any of these programs.   We are currently getting client's information so we can move their applications through quickly to closing once the limits increase.   You can apply online at http://www.tomelder.com/. Or call toll free 1-800-431-8348 x 701 Make sure you specify that you are applying for these programs.

These changes are viewed as overall positive by the experts and the President and Congress want to be seen as doing something about the current "housing crisis"   in an ever watchful election year.

Don't miss your window of opportunity to turn the tables on the "Mortgage Meltdown" and come out a winner.  

I am available on a limited basis to speak on this and other mortgage related topic.   Feel free to contact me.