Fannie Mae & Freddie MAc Limit Increse To Help The Housing Market???

Paul.... in all honesty, my .02, this will not help. Are you aware of the fact that fannie and freddie added hits (penalties) for those that have a credit score less than 680. Do you know that people with a $50,000 income wouldn't qualify for more than $180,000 property, with little monthly debt.  With $120,000 income, that would qualify you for roughly a $410,000 mortgage. 

From what I am seeing, loan amounts only will help in small areas that home values are very high. But then again, look at many of the foreclosures. People in general are over extended. So many in the home range of $400,000 to $650,000 are in trouble. May it be because of income, health, loss of family. On another note, many of these people originally got into the home because of relaxed guidelines. Many of these people should have not been pushed in to these homes, maxed out and stretching their qualifications.   Just my .02.... but we are in a slight recession, not heading into a recession that so many are starting to talk about.

Overall, pushing for higher loan amounts will do what?  Some people scream that rates are high on jumbos... what were rates on conventional loans in 1995? (in the high 8's?)   In 1988? (13%?)   My point?  Let's no so much worry about home values, but in regards to what people are saving and spending....  the average savings for the average homeowner sucks. People max themselves out, want to buy bigger, but have nothing else to show for it. And their retirement plans?  Socked into their house, which is not a great retirement plan....

PS... the only thing with raising the FHA limits across the board, to a much higher limit, is to save those in arms that are adjusting.....  but will it really save them?  Will it be a band aide?  I say this, because I have a client with a $304,000 loan amount at 8.5% and their arm will adjust in a few months. But guess what, you now mortgage insurance.  I am saving them $100 a month and I dropped their rate to 6.25%.  And will that $100 really help them?  In my opinion, it won't do much for about 50% of those and I would bet that 8 to 12 months later, that they would be in the same position as before and possible foreclosure... Until you actually do the numbers/figures, it doesn't do as much as one would think.  again, just my .02.