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

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Real Estate Agent with Benchmark Realty TN 288457

Will raising the Fannie Mae and Freddie Mac Lending Limits Help? Not until we get an across the board minimum limiy of at least $450,000 for FHA. The people who are credit damaged and or lack credit need FHA limits to allow them to buy decent houses anywhere in the country.

Our current NAR President is looking to raise the Fannie Mae and Freddie Mac loan limits and that is a good thing but we need people who can enter the market to start up the housinf market not the trickle down effect.  As we see the $400k and up market lag farther beghind in the econmoy we need to rememeber the business model for housing is an inverted pyramid and the 1st time buyer or damaged credit buyer need to 'PUSH UP" the market.

NAR has called on Congress and the Bush administration to

increase the loan limits for Fannie Mae and Freddie Mac from the current ceiling of $417,000 to $625,000. National Association of REALTORS President Dick Gaylord noted, "This change will permit more families to enter the housing market by making more mortgages available with lower interest rates. Increased home sales will lower inventories and immediately start stabilizing the housing market and the economy."

 

 

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Jeff Belonger
Social Media - Infinity Home Mortgage Company, Inc - Cherry Hill, NJ
The FHA Expert - FHA Loans - FHA mortgages - USDA loans - VA Loans

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....

jeff belonger
Jan 21, 2008 10:43 AM #1
Ambassador
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Jeff Belonger
Social Media - Infinity Home Mortgage Company, Inc - Cherry Hill, NJ
The FHA Expert - FHA Loans - FHA mortgages - USDA loans - VA Loans

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. 

Jan 21, 2008 10:49 AM #2
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Paul Moye

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