The Loan Limit Increase is Almost Here!

By
Mortgage and Lending with Clarion Mortgage Capital, Inc.

  The big day is almost here! President George W.Bush is set to sign the Economic Stimulus Plan on Wednesday. Here is the nitty-gritty of the Increased Loan Limits on Bill HR 5140.

One of my trusted sources tells me that we'll be able to finance residential loans that were considered "Jumbo loans" (real estate financing above the industry-standard definition of conventional conforming loan limits) which is great news. But the question is, will this reform help the majority of homeowners? In the real world, this update will work for a drastically limited number of borrowers.

It is nevertheless, good news for homeowners living in  in expensive metropolitan areas such as Southern California, where median home prices now exceed the $417,000 limit. Borrowers with these programs were subject to higher interest rates due to the slightly higher risk to the lender. To qualify for lower interest rates these mortgages will be eligible if they are granted between July 2007 and Dec. 31, 2008.  This bill would also allow the Federal Housing Administration to insure loans up to the same $729,750 limit.

David's mortgage update:

We're floating today due to no economic reports scheduled for release and mortgage bonds remaining unchanged.

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Rainer
16,926
Bobbi Herman
Realty One Group - Peoria, AZ
Realtor, Peoria Arizona

Joseph,

Will there be any other effects of this bill?  For instance will people with higher mortgages that are at or near 100% combined loan to value be able to pick up an FHA loan and take advantage of lower rates where conventional loans seem to be unwilling to refinance these homes?  Or is this a different issue entirely?

Feb 11, 2008 06:05 PM #1
Rainer
37,908
Kirk Williams
Private Venture Capital - Everett, WA
Huge disappointmen for our area. The conforming limit went up to $493k. Ridiculous. Law makers once again prove they are idiots and have no clue. Ours should be around 600k.  UHHHHGG!!!!
Feb 11, 2008 06:09 PM #2
Rainmaker
120,370
DDR Realty
DDR Realty - Newburgh, NY
Orange County NY
I agree. Increasing the limits is indeed "Big". Now more many consumers can take advantage of FHA financing.
Feb 11, 2008 09:14 PM #3
Rainer
19,956
Membership Cancelled
Pullman, WA
It is great to hear good news happening in our industry! Hopefully it will continue.
Feb 11, 2008 09:21 PM #4
Rainmaker
663,261
Randy L. Prothero
eXp Realty - Mililani, HI
Hawaii REALTOR, (808) 384-5645
Ours was at $625,000 already.  In some areas that is below the median price.
Feb 11, 2008 10:54 PM #5
Rainer
11,679
Marvin Thomas
Allegiance Mortgage Corparation - Fayetteville, NC
Joseph, thanks for the post.  This is good news for consumers in some markets but other the bill didn't address their needs.  I also think for most homeowner that initial had subprime loan or in some stage of pending foreclosure this is awesome news.
Feb 14, 2008 01:01 AM #6
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Joseph David

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