February ExtraCredit Newsletter- NEW Conf/FHA Loan Limits, PLUS- How To Fix A Broken ARM

Mortgage and Lending with Benchmark Fin. - Temecula Real Estate, Temecula Mortgage

Hey All!  

Finally something hopeful to chew on...   The economic stimulus plan worked out last week in Washington will provide nearly a year of larger, lower cost loans for people buying or refinancing higher-cost homes. It also allows for larger loan amounts on Reverse Mortgages for seniors trying to put their days of mortgage payments behind them..   The legislation specifies that the size of loans that can be purchased by government-sponsored mortgage buyers Fannie Mae and Freddie Mac will be increased sharply for a year from the current cutoff of $417,000.; and more than doubling the size of loans available under the FHA program, from $362,790 to $729,750.**   Within no more than 30 days (I expect it within a week), the specific limits by market areas will be published and available. In the meantime, here are the best estimates I have seen:    

H.R. 5140 - Increased Loan Limits


Estimated Median Value based on Exclusive MMG Research and Resources

Adjusted Conforming Limits: 125% of max median price and <= 175% * current conforming limit

Los Angeles-Long Beach-Glendale, CA



Oakland-Fremont-Hayward, CA



Oxnard-Thousand Oaks-Ventura, CA



Salinas, CA



San Diego-Carlsbad-San Marcos, CA



San Francisco-San Mateo-Redwood City, CA



San Jose-Sunnyvale-Santa Clara, CA



Santa Ana-Anaheim-Irvine, CA



Santa Cruz-Watsonville, CA



Napa, CA



San Luis Obispo-Paso Robles, CA



Santa Rosa-Petaluma, CA



Bishop, CA



Santa Barbara-Santa Maria-Goleta, CA



Truckee-Grass Valley, CA



Vallejo-Fairfield, CA



Stockton, CA



Riverside-San Bernardino-Ontario, CA



Modesto, CA



Sacramento--Arden-Arcade--Roseville, CA



Ukiah, CA



Alpine County



Mono County



Calaveras County



Merced, CA



Amador County



Phoenix Lake-Cedar Ridge, CA



Summit County



Madera, CA



Yuba City-Marysville, CA



Redding, CA



Source: Mortgage Market Guide    I see this as an important step in helping the market find a bottom... Not only the limits are going up on conforming and FHA, but as importantly, the Stated programs that are more readily available to Conforming borrowers with excellent credit, will now be available with larger loan sizes, which puts many self employed borrowers back in the game. Higher LTV's and more flexible underwriting guidelines with conforming and FHA will also help provide support to the purchase market, and for those buyer caught in their adjustable loan as it ratchets ever upwards.   97% LTV on Purchases Down Payment Assistance of up to 6% 95% LTV on cash out refinancing No minimum credit scores Liberal credit guidelines No prepayment penalties SFR, Condo's, Town Homes, and Manufactured Seller contributions of up to 6% Non-occupying co-signers Higher income to debt ratios Loans are assumable   Don't forget the "5% DECLINING MARKET" hit that has affected nearly every Conventional loan program above 75%. FHA still allows 97% LTV's on purchase transactions and up to 105% when using some Down Payment Assistance Programs. Also, FHA does not have a "credit risk adjustment" based upon credit score such as the one recently implemented on Conventional loan's.   Real Estate Agents and Mortgage Professionals may contact our office for updates and FHA loan guidelines.   How To Fix a Broken ARM; A Special Home Saver Program for those whose ARM's are adjusting. Look, ideally, everybody would like to be in a 30 yr fixed with amortization, if they could afford the payment. But bottom line is, first and foremost, they need to be able to hang onto the house while they ride this storm out. That means no more negative amortization loans with all the wonderful little surprises that they come with. Here's one approach:  

5/1 I/O

7/1 I/O

30/10 I/O

Property value:$500,000 $500,000 $500,000
Loan amount:400,000400,000400,000
Interest rate4.00%4.63%5.38%
APR 4.20%4.86%5.65%
Second mortgage:1,333.001,541.671,791.67
  Note that with the increase in conforming limits, this approach will be viable for people with formerly Jumbo loans. Call me to discuss! See you outside the box! PS   If you are listing bank owned properties, and the bank is ready to start working with investors, touch base with me. I may be able to introduce you to some aggressive investors who buy in your area.           Go ahead. Click it...  

What does Fed rate cut mean for you?
The Federal Reserve cut interest rates for the second time in about about a week amid rumblings about a recession. While Wall Street may celebrate the lower rates, what will it mean for the average consumer? CNN personal finance editor Gerri Willis breaks it down.
Read the full story at CNN.com

Stocks Surge on Big Fed Rate Cut
The FOMC's super-sized half-point easing Tuesday sparked huge gains in equity indexes.
Read the full story at BusinessWeek

Is Yahoo Worth $44.6 billion?
On February 1st, Microsoft CEO Steve Ballmer announced that the company initiated a $44.6 billion takeover bid for Yahoo! This is the second time the juggernaut has made a play for the online service.
Read the full story at Newsweek

A Better Way to Track the Economy
A groundbreaking Commerce Deptartment report could lead to new yardsticks for measuring growth.
Read the full story at BusinessWeek

Writer's Strike having impact on prime-time
As broadcast networks head into the February sweeps period, the prolonged writers strike is starting to be felt in prime-time ratings.
Read the full story at BusinessWeek

Twenty for Twenty

Don't like repeated trips to the grocery store? Stock up on these 20 ingredients, and you can make 20 delicious dinners.
Read the full recipe at AllRecipes.com

New Super-Efficient Micro Chip Could Run on Body Heat

A new chip uses so little power, it could enable sensors, communication devices and other gadgets that run on body heat and movement alone.
Read the full story at Wired.com

Revolutionary New Jet
A new jet engine designed to fly at seven times the speed of sound appears to have been successfully tested.
Read the full story at BBC News

Asian Giant Hornet
The Asian giant hornet (Vespa mandarinia) is the world's largest hornet. Queens may reach a length of 55 mm (2.2 in). Due to it's size, it is known in Japan as Suzume-Bachi or Sparrow-Bee.
Read the full story at Wikipedia.com

Blind Man in Texas
There once was a blind man who decided to visit Texas.

When he arrived on the plane, he felt the seats and said, "Wow, these seats are big!" The  person next to him answered, "Everything is big in Texas."

When he finally arrived in Texas, he decided to visit a bar. Upon arriving in the bar, he ordered a beer and got a mug placed between his hands. He exclaimed, "Wow these mugs are big!" The bartender replied, "Everything is big in Texas."

After a couple of beers, the blind man asked the bartender where the  bathroom was located. The bartender replied, "Second door to the right."  The blind man headed for the bathroom, but accidentally stumbled and skipped the second door. Instead, he entered the third door, which lead to the swimming pool and fell into the pool by accident.

Scared to death, the blind man started shouting, "Don't flush, don't flush!"




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Comments (1)



Apr 20, 2009 01:46 AM