What happened to new jumbo loan limit?

<p>Nude</p>

<p>That looks like some serious <strong>"bubble"!</strong></p>

<p>awgee/Trooper/IR</p>

<p>Remember my motto: "can't see it from where I live" </p>

<p>I read that the city of San Clemente is sueing SunCal Development for not living up to their development agreement. Things are looking gloomy for the OC.</p>

<p>Good news is my partner and I closed a short sale last week. <strong>You really don't want to deal with the banks right now.</strong></p>

<p>I think I will go out and commune with nature for a while!!</p>

<p>Enjoy!</p>

<p> </p>

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<p> </p>
 
Lol to the picture. Re homeowner equity being at its lowest since 1945 (the concept, not necessarily the article referenced), one thing I've realized is that, as we're seeing now (my wife and me), when house values are depreciating, there's doesn't seem to be any motivation to pay down prinicipal and thereby build equity if you're planning to sell anywhere in the near term. Better to have the money in hand (or accruing interest in the bank) than to pay off a principal you'd be able to pay off anyway once you sold the house. (I recognize this situation doesn't apply to people who bought even more overpriced homes than we did and are selling at a loss now.)



So, while we do have some equity from having paid off the piggyback HELOC, I almost wish at this point that we didn't, because we'd have much more saved up for the down payment on our new home if we'd instead have put the money into an appreciating investment, and we'd still be able to pay off our mortgage+HELOC upon selling the house. In other words (or perhaps relatively the same words), from our perspective, in the current market it would be a better thing to not have equity than to have it. Looking at a home as an investment (which I agree is probably not the right approach for most people), having equity means you've invested in something that's losing money. So I guess the fact that homeowner equity is lower now than it's been in a long while doesn't really surprise me, and I don't really see it as a bad thing in and of itself. Rather, it's an indicator of other bad things, such as that houses are bad right now from a short-term investment perspective (which applies to people choosing not to build equity), and people can't afford to pay their mortgages right now (which applies to people currently unable to build equity).



Just general comments/observations here to continue this interesting discussion, not responding or presenting counterpoints to anything in particular :).
 
<p><a href="http://money.cnn.com/2008/03/06/real_estate/expensive_mortgages_get_cheaper/index.htm?postversion=2008030617">http://money.cnn.com/2008/03/06/real_estate/expensive_mortgages_get_cheaper/index.htm?postversion=2008030617</a></p>

High-cost mortgages just got cheaper

Freddie and Fannie can now purchase loans worth as much as $793,000, while the FHA can insure loans for up to $729,000.

<p>The new loan limits for Fannie and Freddie vary by area based on local median home prices and go as high as $793,750 in Honolulu. (For details, see table below).</p>

<p>Loan limits for FHA-insured loans were even lower; no more than $362,790. Now mortgages of up to $729,750 will qualify for FHA insurance.</p>

<p>The problem was that there are whole swaths of the nation where the typical <a href="http://money.cnn.com/2008/02/14/real_estate/home_prices_fall_for_year/index.htm?postversion=2008021414">home cost far more</a> than that, and non-conforming or "jumbo loans" carry interest rates of about a point higher. For a $500,000 mortgage, that's an additional spending of $330 a month.</p>

<p>In many parts of the country prices are much higher. In San Jose, Calif, the median priced home costs nearly $850,000, according to the latest figures from the National Association of Realtors. In San Francisco, the figure is nearly $780,000; in Anaheim, Calif.; $657,000; in Honolulu $625,000; and in the New York metro area, $525,000. That means more than half the loans in those markets would not qualify under conforming loan limits.</p>

<p>"Families in high-cost states have been priced out of FHA-backed loans," HUD Secretary Alphonso Jackson said earlier today, in a speech before the Las Vegas Association of Realtors. "This has created a vacuum, filled by exotic subprime loans."</p>
 
<p><a href="https://www.efanniemae.com/sf/mortgageproducts/index.jsp">https://www.efanniemae.com/sf/mortgageproducts/index.jsp</a>#</p>

<strong><em>

<p align="justify">Announcement 08-05 March 6, 2008 </p>

<p align="justify">Amends these Guides: Selling </p>

<p align="justify">Temporary Increase to Our Conventional Loan Limits </p>



<p>https://www.efanniemae.com/sf/guides/ssg/annltrs/pdf/2008/0805.pdf</p>

</em></strong>
 
I have a big question: does anyone know (or can anyone speculate on) how interest rates (jumbo and conforming) will be impacted by the new loan limits? I understand that being able to qualify for a conforming loan now instead of a jumbo automatically means you'll have access to the traditionally lower conforming loan interest rate. However, is this also good news for rates in general...are the powers that be thinking that this conforming limit change will also result in dynamics that will result in lower interest rates across the board?



I ask because I'm still going to need a jumbo loan (~900,000+) after the new limits are implemented, and I'm wondering if I should wait and see if the rates will go down or just lock at what they are today.



THANKS to anyone who can provide input on this.
 
giltee - rates are going through the roof right now. Regular old jumbos are up a half point over this week alone it would appear. Heck, even the conforming 30-year is up .75 to 1.0 since the government started messing around with things back in late January... Rates appear to be going nowhere but up.
 
They will be priced higher. The pricing will be available on 4/1/08.





And, IPO is right, rates are going up, and up.


<a href="http://tinyurl.com/2p4foh">


Deleveraging is happening</a>...


<a href="http://www.housingwire.com/2008/03/06/mortgage-rates-swing-wildly-amid-rmbs-selling-pressure/">


And, from housingwire</a>...
 
<p>Yes, that is true SCG, but home prices are STILL near historic highs. A half point jump in the 30-year conforming in less than a week is going through the roof. A pace of 2 points per month worth of movement on one of the more stable mortgage rates is scary and definitely not the norm. </p>
 
<a href="http://calculatedrisk.blogspot.com/2008/03/jumbo-conforming-loan-guidelines.html" linkindex="330" set="yes">Jumbo Conforming Loan Guidelines</a>

Are here from Fannie Mae. I must say I am really surprised. This level of speed has "political pressure" written all over it.





<a href="https://www.efanniemae.com/sf/mortgageproducts/index.jsp" linkindex="331" set="yes">The details</a>:





1. Fixed rates can be sold to Fannie on or after April 1; ARMs on or after May 1. The loan has to be closed on or after March 1 to be subject to the following rules; inventory loans (closed from last July to March) have to be subject to a "negotiated commitment."





2. No AUS approvals. It seems they plan to update Desktop Underwriter (their automated underwriting system) before the year is out, but they haven't done so yet and they're rollin' without it.





3. For principal residences, fixed-rate loans are limited to 90% LTV/CLTV for a purchase, and 75% LTV/95% CLTV for a no-cash-out refi. ARMs are limited to 80%/80% on a purchase and 75%/90% on a no-cash-out refi. CASH OUT REFIS ARE NOT ALLOWED.





4. For second homes and investment properties, the maximum LTV/CLTV is 60% in all cases for purchases and no-cash-out refis.





5. Minimum FICO for any loan is 660, with a minimum of 700 for LTVs greater than 80%.





6. One-unit properties only.





7. On a primary residence, existing subordinate liens <em>must be</em> resubordinated. The new loan cannot "cash out" an existing subordinate lien.





8. No late mortgage payments in the preceding 12 months.





9. 45% maximum DTI, with ARMs qualified at fully-amortizing fully-indexed rate.





10. Full doc only.





11. For purchases, the borrower must make at least 5% of the down payment from his or her own funds.





12. A full appraisal with interior inspection is required on all loans; if the property value is more than $1 million, a field review appraisal is also required.





13. Loans are subject to all current pricing adjustments, plus another .25 for FRMs and .75 for ARMs.
 
<p><em>"3. For principal residences, fixed-rate loans are limited to 90% LTV/CLTV for a purchase, and 75% LTV/95% CLTV for a no-cash-out refi. ARMs are limited to 80%/80% on a purchase and 75%/90% on a no-cash-out refi. CASH OUT REFIS ARE NOT ALLOWED."</em></p>

<p>Is California considered a declining market requireing a larger down?</p>

<p>I just closed a short sale with a client and his bank required a 30% down payment and he is a fairly wealthy person. </p>

<p>Regards</p>

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