We've been hearing about it - now here's the news for new FHA loan limits in Maricopa County (barring a Congressional Stay). Thanks, Mark Taylor of Awesome Rates, for the facts!
So with all the rampant rumors and conjecture by people who just want to make noise. I have attached the correct document from FHA on the proposed loan reductions.
"Who cares" an agent said yesterday - well my response was "you should and here is why!"
Barring a Congressional Stay our loan amounts will be reduced Oct 1st 2011
If you have buyers on the fence wanting to buy a home on the upper reaches of financing they will not be able to after Oct 1st. For example in Maricopa County Arizona currently the loan limit is $346,250 it will be $271,050 a drop of $75,200 in buying power!
In San Diego where I write loans it is dropping $151,250, In Monterrey County it is $246,750 and Los Angeles County buying power is reduced by $104,250.
If you have clients with offers on short sales you need to see what can be done to expedite the process or start preparing for a back up plan!
To see how this may affect you go here: FHA LOAN LIMIT UPDATE
Serious Stuff Right?
When analyzed by potential impact on loan counts, nine states may experience declines that are greater than 5%: Arizona, California, Colorado, Connecticut, District of Columbia, Massachusetts, Maine, New Hampshire, and Oregon. When evaluated by potential impact on dollar volume, eight states may experience declines that are greater than 10%: Arizona, California, Connecticut, District of Columbia, Massachusetts, New Hampshire, Nevada, and Puerto Rico.
What does it really mean for us?
As with anything in our industry of late we are all fueled by the rumor mill and coffee house myth that somehow becomes an urban legend and quickly a fact - like QRM mortgages and the 3% tax hit on all sales of future real estate all of which have become very mute - but from the press and local MLS meeting you would have thought that the world had stopped turning.
Again I believe this to be the case. While any reduction in my ability to help someone finance a home is irritating to say the least the impact based on 2010 and 2011 performance will shock you as to how little of an impact this may have:
For the U.S. as a whole, approximately 3% of loans by count (33,301) and 6% by dollar volume ($14.2 billion) endorsed in calendar year 2010 would not have been endorsed had HERA limits been in effect. In calendar year 2011 to date (January through April), approximately 2% of endorsed loans by count (6,673) and 7% by dollar volume ($2.8 billion) would have been affected.
So yes this is an irritation, and a major adjustment for some. Good news is we have plenty of warning to market to all of our clients - yes go ahead re-blogg this send it viral lets get our buyers re-motivated to getting a home before its too late. And if we do this by the times October rolls around we will be ready for it and it will not even be on our radar as we quizzically look at our competitors running around unprepared as deals fall of the table in front of their eyes.
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Thanks for reading my FHA NEW LOAN LIMITS - Get the facts dis-spell the myths Oct 1st 2011