Comments on: When Will the Conforming Loan Limit be Raised to $729,750? (part two) http://bfletcher.wordpress.com/2008/02/21/when-will-the-conforming-loan-limit-be-raised-to-729950-part-two/ A Blog About Learning To Blog. Sun, 01 Nov 2009 21:06:14 +0000 http://wordpress.com/ hourly 1 By: Pirsey http://bfletcher.wordpress.com/2008/02/21/when-will-the-conforming-loan-limit-be-raised-to-729950-part-two/#comment-129 Pirsey Wed, 22 Apr 2009 07:13:25 +0000 http://bfletcher.wordpress.com/?p=17#comment-129 I can tell that this is not the first time at all that you write about this topic. Why have you decided to write about it again? I can tell that this is not the first time at all that you write about this topic. Why have you decided to write about it again?

]]> By: bfletcher http://bfletcher.wordpress.com/2008/02/21/when-will-the-conforming-loan-limit-be-raised-to-729950-part-two/#comment-75 bfletcher Mon, 31 Mar 2008 18:39:32 +0000 http://bfletcher.wordpress.com/?p=17#comment-75 Hi Suzanne, Thanks for your comment. I believe it is not so much a matter of what the lenders are doing, as it is how Fannie and Freddie have elected to implement the authorization by Congress to buy the larger loans. Lenders can only offer what Fannie and Freddie make available. I have not had an opportunity to read the actual authorization that was passed but Fannie and Freddie have indeed released the higher loan amounts in the form of a separate program. The new "Jumbo Conforming" program does indeed set the limits based on metro area value data as calculated by OFHEO. See the area limits at the link below. http://www.ofheo.gov/media/hpi/AREA_LIST.pdf The original "Conforming" loans are still unchanged with a limit of $417,000 nationwide (with the exception of Alaska and Hawaii.) From everything I have read, this decision was made primarily out of concern for the safety of the original Conforming programs. As you probably know, Fannie and Freddie do not loan their own funds, but rather raise the funds through the sale of instruments backed by the mortgages they "buy." Since there is so much fear in the marketplace surrounding the "Jumbo" mortgages right now it is difficult to sell securities backed by the larger loans. It takes a much higher yield to attract investors for the larger loans hence the spread between the traditional Conforming rates and the traditional Jumbo. Fannie and Freddie did not want to take a chance that the larger "Conforming" balances might negatively affect the traditional Conforming rates. Legal or not it seems like the decision was a sound one. Investors still appear to be demanding a much higher yield to buy securities backed by the "Jumbo Conforming" loans. Rates for the new Jumbo are not quite as high as the traditional Jumbo loan but are still quite a bit higher than the traditional Conforming. I will have to read the actual bill and see if I read it that way you do. I kinda hope I don't because I am glad that they did it this way. I would hate to see the new higher limits poison the well for the traditional conforming loans. Thanks again for your comment. Please visit again. BFletcher Hi Suzanne, Thanks for your comment. I believe it is not so much a matter of what the lenders are doing, as it is how Fannie and Freddie have elected to implement the authorization by Congress to buy the larger loans. Lenders can only offer what Fannie and Freddie make available.

I have not had an opportunity to read the actual authorization that was passed but Fannie and Freddie have indeed released the higher loan amounts in the form of a separate program. The new “Jumbo Conforming” program does indeed set the limits based on metro area value data as calculated by OFHEO. See the area limits at the link below.

http://www.ofheo.gov/media/hpi/AREA_LIST.pdf

The original “Conforming” loans are still unchanged with a limit of $417,000 nationwide (with the exception of Alaska and Hawaii.)

From everything I have read, this decision was made primarily out of concern for the safety of the original Conforming programs. As you probably know, Fannie and Freddie do not loan their own funds, but rather raise the funds through the sale of instruments backed by the mortgages they “buy.” Since there is so much fear in the marketplace surrounding the “Jumbo” mortgages right now it is difficult to sell securities backed by the larger loans. It takes a much higher yield to attract investors for the larger loans hence the spread between the traditional Conforming rates and the traditional Jumbo. Fannie and Freddie did not want to take a chance that the larger “Conforming” balances might negatively affect the traditional Conforming rates. Legal or not it seems like the decision was a sound one. Investors still appear to be demanding a much higher yield to buy securities backed by the “Jumbo Conforming” loans. Rates for the new Jumbo are not quite as high as the traditional Jumbo loan but are still quite a bit higher than the traditional Conforming.

I will have to read the actual bill and see if I read it that way you do. I kinda hope I don’t because I am glad that they did it this way. I would hate to see the new higher limits poison the well for the traditional conforming loans.

Thanks again for your comment. Please visit again.

BFletcher

]]> By: Suzanne http://bfletcher.wordpress.com/2008/02/21/when-will-the-conforming-loan-limit-be-raised-to-729950-part-two/#comment-74 Suzanne Mon, 31 Mar 2008 14:49:57 +0000 http://bfletcher.wordpress.com/?p=17#comment-74 this is interesting. I read the actual bill and it seems to me if that is what the lenders do they are operating against the actual law. The law is pretty sepcific as to raising "the conforming ceiling in accordance with the metropolitan area's median price or some percentage over what it was...FHLB has all ready put this into place and they do not have a "special conforming jumbo" which to me seems agains the actual bill/law that was put into place. Seems like a great opportunity for class action lawyers to take advantage of. I hope your blog is read by some one who can make these legislators put their money where their mouths are otherwise the whole thing was a big puff of hot air. I wrote to Nancy Pelosi and it got kicked back since her Federal email rejected and her city of SF would only take email if you were registered in her district in their database. Sad that we can't even get emails to our law makers. this is interesting. I read the actual bill and it seems to me if that is what the lenders do they are operating against the actual law. The law is pretty sepcific as to raising “the conforming ceiling in accordance with the metropolitan area’s median price or some percentage over what it was…FHLB has all ready put this into place and they do not have a “special conforming jumbo” which to me seems agains the actual bill/law that was put into place. Seems like a great opportunity for class action lawyers to take advantage of. I hope your blog is read by some one who can make these legislators put their money where their mouths are otherwise the whole thing was a big puff of hot air. I wrote to Nancy Pelosi and it got kicked back since her Federal email rejected and her city of SF would only take email if you were registered in her district in their database. Sad that we can’t even get emails to our law makers.

]]> By: bfletcher http://bfletcher.wordpress.com/2008/02/21/when-will-the-conforming-loan-limit-be-raised-to-729950-part-two/#comment-67 bfletcher Sun, 02 Mar 2008 17:29:50 +0000 http://bfletcher.wordpress.com/?p=17#comment-67 Gee thanks Mom, give my best to Dad. Seriously though, thanks for your kind words Mr. Mortgages. You are welcome to stop by and visit my blog anytime! Gee thanks Mom, give my best to Dad.

Seriously though, thanks for your kind words Mr. Mortgages. You are welcome to stop by and visit my blog anytime!

]]> By: flexible mortgages http://bfletcher.wordpress.com/2008/02/21/when-will-the-conforming-loan-limit-be-raised-to-729950-part-two/#comment-65 flexible mortgages Sun, 02 Mar 2008 15:40:40 +0000 http://bfletcher.wordpress.com/?p=17#comment-65 Hi, I like the way you are performing your work .. Its really amazing .. The topic is really brilliant and the way you have discussed is really fantastic! Hi,
I like the way you are performing your work .. Its really amazing .. The topic is really brilliant and the way you have discussed is really fantastic!

]]> By: Loans News Aggregator » When will the conforming loan limit be raised to $729950? (part two) http://bfletcher.wordpress.com/2008/02/21/when-will-the-conforming-loan-limit-be-raised-to-729950-part-two/#comment-48 Loans News Aggregator » When will the conforming loan limit be raised to $729950? (part two) Thu, 21 Feb 2008 20:16:34 +0000 http://bfletcher.wordpress.com/?p=17#comment-48 [...] Original post here [...] [...] Original post here [...]

]]> By: Loans - Information on Loans » When will the conforming loan limit be raised to $729950? (part two) http://bfletcher.wordpress.com/2008/02/21/when-will-the-conforming-loan-limit-be-raised-to-729950-part-two/#comment-47 Loans - Information on Loans » When will the conforming loan limit be raised to $729950? (part two) Thu, 21 Feb 2008 19:39:52 +0000 http://bfletcher.wordpress.com/?p=17#comment-47 [...] will the conforming loan limit be raised to $729950? (part two) Kelly LaVaute wrote an interesting post today onHere’s a quick excerptThis story suggests that rather than [...] [...] will the conforming loan limit be raised to $729950? (part two) Kelly LaVaute wrote an interesting post today onHere’s a quick excerptThis story suggests that rather than [...]

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