GSE limits slated to drop (PLUS bonus question for mortgage experts)

[Anonymous]

Of course in general buyers in prime coastal areas have more cash. But during the housing boom, I guarantee a large proportion of these buyers relied on a positive equity home sale to cover the down payment. These buyers by and large don’t exist anymore. Again it is naive to think that any area is immune.

We’ll find out for sure when (if) the government ever takes away their artificial housing support. The lowering of conforming loan limits is one step and it will certainly affect most areas of San Diego, some more than others as has been pointed out.

[scaredyclassic]

after all this effort to prop up the housing market, doesn’t it just seem like there has to be a catch; like, we’ll lower the limit, but give you a tax credit for the difference, or these are the new rules, but if we begin to notice it has any bad effect, we’ll immediately revoke them and go back where we were, or some other freaky shenanigans.

[scaredyclassic]

after all this effort to prop up the housing market, doesn’t it just seem like there has to be a catch; like, we’ll lower the limit, but give you a tax credit for the difference, or these are the new rules, but if we begin to notice it has any bad effect, we’ll immediately revoke them and go back where we were, or some other freaky shenanigans.

[scaredyclassic]

after all this effort to prop up the housing market, doesn’t it just seem like there has to be a catch; like, we’ll lower the limit, but give you a tax credit for the difference, or these are the new rules, but if we begin to notice it has any bad effect, we’ll immediately revoke them and go back where we were, or some other freaky shenanigans.

[scaredyclassic]

after all this effort to prop up the housing market, doesn’t it just seem like there has to be a catch; like, we’ll lower the limit, but give you a tax credit for the difference, or these are the new rules, but if we begin to notice it has any bad effect, we’ll immediately revoke them and go back where we were, or some other freaky shenanigans.

[scaredyclassic]

after all this effort to prop up the housing market, doesn’t it just seem like there has to be a catch; like, we’ll lower the limit, but give you a tax credit for the difference, or these are the new rules, but if we begin to notice it has any bad effect, we’ll immediately revoke them and go back where we were, or some other freaky shenanigans.

[earlyretirement]

[quote=Rich Toscano]Right, nobody can argue that it’s a positive, but is it a significant negative?

sdr says no, that it’s the same to qualify for both types of loans. But for instance sdr, I’ve heard that down payment requirements are higher for non-conforming loans… if this is true, (even if “qualifying” is otherwise the same), that represents a tightening of financing for this price range. Any idea whether that’s the case?[/quote]

Hey Rich,

I think “significant” can be a bit relative. I don’t necessarily think it will be too significant on it’s own. But when you couple it with everything else that is going on at the same time including a tighter credit environment, continued unemployment and a potential start to a Bear stock market and correction of commodities and couple those things all together and I think it’s going to add up. But I too am not sure how significant it will be.

And I was more speaking on the national scale vs. just San Diego but definitely I see it having an effect in that price range you mentioned for San Diego as well.

sdr sounds like he is hanging around the wealthy crowd, which I admit there is plenty of in San Diego. However, there are a lot of pikers out there as well. From the outside looking in, they might appear to have money or at least a healthy net worth… but it’s all smoke and mirrors and they are leveraged to the hilt.

Some times you don’t even know about it (even if it’s your neighbors) until you read about them losing their houses.

I think people really underestimate all of the negative equity out there. People are finally starting to realize just how many people have a $0 net worth (or even a negative $0 net worth).

The trends don’t look too good for the rest of 2011. I’m not sure how even the biggest bull could try to argue on that one.

The government WILL eventually ease out of supporting the housing market and when they do it will be ugly. It might take a few years but I do believe it will happen. Personally, I wouldn’t mind seeing them get rid of the interest exemption as well.

[earlyretirement]

[quote=Rich Toscano]Right, nobody can argue that it’s a positive, but is it a significant negative?

sdr says no, that it’s the same to qualify for both types of loans. But for instance sdr, I’ve heard that down payment requirements are higher for non-conforming loans… if this is true, (even if “qualifying” is otherwise the same), that represents a tightening of financing for this price range. Any idea whether that’s the case?[/quote]

Hey Rich,

I think “significant” can be a bit relative. I don’t necessarily think it will be too significant on it’s own. But when you couple it with everything else that is going on at the same time including a tighter credit environment, continued unemployment and a potential start to a Bear stock market and correction of commodities and couple those things all together and I think it’s going to add up. But I too am not sure how significant it will be.

And I was more speaking on the national scale vs. just San Diego but definitely I see it having an effect in that price range you mentioned for San Diego as well.

sdr sounds like he is hanging around the wealthy crowd, which I admit there is plenty of in San Diego. However, there are a lot of pikers out there as well. From the outside looking in, they might appear to have money or at least a healthy net worth… but it’s all smoke and mirrors and they are leveraged to the hilt.

Some times you don’t even know about it (even if it’s your neighbors) until you read about them losing their houses.

I think people really underestimate all of the negative equity out there. People are finally starting to realize just how many people have a $0 net worth (or even a negative $0 net worth).

The trends don’t look too good for the rest of 2011. I’m not sure how even the biggest bull could try to argue on that one.

The government WILL eventually ease out of supporting the housing market and when they do it will be ugly. It might take a few years but I do believe it will happen. Personally, I wouldn’t mind seeing them get rid of the interest exemption as well.

[earlyretirement]

[quote=Rich Toscano]Right, nobody can argue that it’s a positive, but is it a significant negative?

sdr says no, that it’s the same to qualify for both types of loans. But for instance sdr, I’ve heard that down payment requirements are higher for non-conforming loans… if this is true, (even if “qualifying” is otherwise the same), that represents a tightening of financing for this price range. Any idea whether that’s the case?[/quote]

Hey Rich,

I think “significant” can be a bit relative. I don’t necessarily think it will be too significant on it’s own. But when you couple it with everything else that is going on at the same time including a tighter credit environment, continued unemployment and a potential start to a Bear stock market and correction of commodities and couple those things all together and I think it’s going to add up. But I too am not sure how significant it will be.

And I was more speaking on the national scale vs. just San Diego but definitely I see it having an effect in that price range you mentioned for San Diego as well.

sdr sounds like he is hanging around the wealthy crowd, which I admit there is plenty of in San Diego. However, there are a lot of pikers out there as well. From the outside looking in, they might appear to have money or at least a healthy net worth… but it’s all smoke and mirrors and they are leveraged to the hilt.

Some times you don’t even know about it (even if it’s your neighbors) until you read about them losing their houses.

I think people really underestimate all of the negative equity out there. People are finally starting to realize just how many people have a $0 net worth (or even a negative $0 net worth).

The trends don’t look too good for the rest of 2011. I’m not sure how even the biggest bull could try to argue on that one.

The government WILL eventually ease out of supporting the housing market and when they do it will be ugly. It might take a few years but I do believe it will happen. Personally, I wouldn’t mind seeing them get rid of the interest exemption as well.

[earlyretirement]

[quote=Rich Toscano]Right, nobody can argue that it’s a positive, but is it a significant negative?

sdr says no, that it’s the same to qualify for both types of loans. But for instance sdr, I’ve heard that down payment requirements are higher for non-conforming loans… if this is true, (even if “qualifying” is otherwise the same), that represents a tightening of financing for this price range. Any idea whether that’s the case?[/quote]

Hey Rich,

I think “significant” can be a bit relative. I don’t necessarily think it will be too significant on it’s own. But when you couple it with everything else that is going on at the same time including a tighter credit environment, continued unemployment and a potential start to a Bear stock market and correction of commodities and couple those things all together and I think it’s going to add up. But I too am not sure how significant it will be.

And I was more speaking on the national scale vs. just San Diego but definitely I see it having an effect in that price range you mentioned for San Diego as well.

sdr sounds like he is hanging around the wealthy crowd, which I admit there is plenty of in San Diego. However, there are a lot of pikers out there as well. From the outside looking in, they might appear to have money or at least a healthy net worth… but it’s all smoke and mirrors and they are leveraged to the hilt.

Some times you don’t even know about it (even if it’s your neighbors) until you read about them losing their houses.

I think people really underestimate all of the negative equity out there. People are finally starting to realize just how many people have a $0 net worth (or even a negative $0 net worth).

The trends don’t look too good for the rest of 2011. I’m not sure how even the biggest bull could try to argue on that one.

The government WILL eventually ease out of supporting the housing market and when they do it will be ugly. It might take a few years but I do believe it will happen. Personally, I wouldn’t mind seeing them get rid of the interest exemption as well.

[earlyretirement]

[quote=Rich Toscano]Right, nobody can argue that it’s a positive, but is it a significant negative?

sdr says no, that it’s the same to qualify for both types of loans. But for instance sdr, I’ve heard that down payment requirements are higher for non-conforming loans… if this is true, (even if “qualifying” is otherwise the same), that represents a tightening of financing for this price range. Any idea whether that’s the case?[/quote]

Hey Rich,

I think “significant” can be a bit relative. I don’t necessarily think it will be too significant on it’s own. But when you couple it with everything else that is going on at the same time including a tighter credit environment, continued unemployment and a potential start to a Bear stock market and correction of commodities and couple those things all together and I think it’s going to add up. But I too am not sure how significant it will be.

And I was more speaking on the national scale vs. just San Diego but definitely I see it having an effect in that price range you mentioned for San Diego as well.

sdr sounds like he is hanging around the wealthy crowd, which I admit there is plenty of in San Diego. However, there are a lot of pikers out there as well. From the outside looking in, they might appear to have money or at least a healthy net worth… but it’s all smoke and mirrors and they are leveraged to the hilt.

Some times you don’t even know about it (even if it’s your neighbors) until you read about them losing their houses.

I think people really underestimate all of the negative equity out there. People are finally starting to realize just how many people have a $0 net worth (or even a negative $0 net worth).

The trends don’t look too good for the rest of 2011. I’m not sure how even the biggest bull could try to argue on that one.

The government WILL eventually ease out of supporting the housing market and when they do it will be ugly. It might take a few years but I do believe it will happen. Personally, I wouldn’t mind seeing them get rid of the interest exemption as well.

[bearishgurl]

[quote=earlyretirement]…The government WILL eventually ease out of supporting the housing market and when they do it will be ugly. It might take a few years but I do believe it will happen. Personally, I wouldn’t mind seeing them get rid of the interest exemption as well.[/quote]

The MID (up to $25K annually for a personal residence) is the ONLY reason wealthy buyers take out a mortgage at all. If this were eliminated, these homeowners would simply retire their mortgages.

[bearishgurl]

[quote=earlyretirement]…The government WILL eventually ease out of supporting the housing market and when they do it will be ugly. It might take a few years but I do believe it will happen. Personally, I wouldn’t mind seeing them get rid of the interest exemption as well.[/quote]

The MID (up to $25K annually for a personal residence) is the ONLY reason wealthy buyers take out a mortgage at all. If this were eliminated, these homeowners would simply retire their mortgages.

[bearishgurl]

[quote=earlyretirement]…The government WILL eventually ease out of supporting the housing market and when they do it will be ugly. It might take a few years but I do believe it will happen. Personally, I wouldn’t mind seeing them get rid of the interest exemption as well.[/quote]

The MID (up to $25K annually for a personal residence) is the ONLY reason wealthy buyers take out a mortgage at all. If this were eliminated, these homeowners would simply retire their mortgages.

[bearishgurl]

[quote=earlyretirement]…The government WILL eventually ease out of supporting the housing market and when they do it will be ugly. It might take a few years but I do believe it will happen. Personally, I wouldn’t mind seeing them get rid of the interest exemption as well.[/quote]

The MID (up to $25K annually for a personal residence) is the ONLY reason wealthy buyers take out a mortgage at all. If this were eliminated, these homeowners would simply retire their mortgages.

[Author]

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