JWM,,,
You are one of the few posters here who has consistently seen the big picture(macro) while so many others are only focused on their own neighborhood or street.
When the “jumbo conforming” loans were first announced, I tried to tell people that the devil would be in the details, and not to get excited about them.
There was no way that the rates would be the same as the $417K conforming limit, and they aren’t.
My competition was telling people to get their apps in early because there was sure to be a flood of activity when the limits were raised. I was laughing on how easily some people believe what they are told by fools, and ignore reality & facts.
I haven’t seen many that can actually qualify for the new program full doc. Either they haven’t got the equity to refi OR cannot qualify based on debt ratios.
For investment or 2nd homes you need 40% equity, and the debt ratios are lower on these loans than on the old $417K, which makes it harder to qualify.
The program wasn’t designed to save California. Now that the median has dropped, they should lower the jumbo limits.
I cannot imagine how much was spent to roll out the program, but it was just another band-aid and delayed a few people going FC by a few months…
Conforming PAR rates today are 5.875%, on April 1st they were 5.375%, it takes more income to qualify for the same loan at the max debt ratio.
The best thing for many people is to do it the “Conseco way” and walk away because it makes sense. but some people don’t want to accept this….yet
