Diane Tuman reports that the Stimulus Package, recently signed into law by President Obama, allows for a reversion to the 2008 conforming loan limits, in high-cost counties:
This means Fannie Mae and Freddie Mac conforming loan limits will be $729,750 for one-unit properties in certain high-cost areas of the continental U.S. The previous limit for high-cost areas was $625,500.
Why can’t California lenders then, approve a $700,000 conforming loan? It’s all about the execution of those new (or renewed) loan limits. They just ain’t available today! Read this thread in the Zillow “advice” section.
My parsed opinion about this issue was:
I lend in Orange County and would tell you to advise a buying customer that the higher loan limit, with its lower down payment requirements and superior pricing, will MOST LIKELY be executed prior to April 1, 2009. Still, I’d tell you to advise a selling customer to insist that the earnest money deposit be non-refundable, if accepting an offer based upon that information.
Ironic, huh? I’m telling a REALTOR to submit offers, with a 45-day close, based upon the higher loan limit while I’m telling a REALTOR, to accept offers, based upon the same information with serious repercussions for non-performance. Confused?
Well, the whole thing is confusing, if you’re standing where I stand. My guess, and it’s just a guess, is that lenders will accept the higher loan limits in 30-45 days. If you NEED that higher loan limit, hold your breath and keep your eye on the mortgage rates.
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Comments
1 Comment so far
benjamin moscatiello
Sorry I’m off subject a bit.How about 3.5 30 year rates.Is it really possible we’ll see this in the next few months? it’s now march 21 and I’m refering to the reserve purchases last week and the commitment in no uncertain terms by the current govm.t to achieve this goal.I feel they just may pull it off.
I think they’ve got the muscle and the money.
you’re thoughts?