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August 8, 2007 at 9:51 AM #71866August 8, 2007 at 9:55 AM #71748
(former)FormerSanDiegan
Participantbsrsharma hit it pretty close.
There are still jumbo loans but there is an increase in rate to compensate for perceived (and real) increase in risk.
bob007, this is not a regulation change, it’s a change in the marketplace. The conforming loan limit has always been the maximum amount that the Government Sponsored Enterprises ( GSEs are FNMA or “Fannie Mae” and Freddie Mac … I forget the initials for old Fred) could purchase.
These entities were created to provide a secondary market for mortgage loans. The secondary market for loans above the conforming loan limit consists of many market participants, who are now scared of mortgage-backed securities and are either not buying the loans or are requiring much larger interest rate spreads to take on the risk.August 8, 2007 at 9:55 AM #71864Participantbsrsharma hit it pretty close.
There are still jumbo loans but there is an increase in rate to compensate for perceived (and real) increase in risk.
bob007, this is not a regulation change, it’s a change in the marketplace. The conforming loan limit has always been the maximum amount that the Government Sponsored Enterprises ( GSEs are FNMA or “Fannie Mae” and Freddie Mac … I forget the initials for old Fred) could purchase.
These entities were created to provide a secondary market for mortgage loans. The secondary market for loans above the conforming loan limit consists of many market participants, who are now scared of mortgage-backed securities and are either not buying the loans or are requiring much larger interest rate spreads to take on the risk.August 8, 2007 at 9:55 AM #71872Participantbsrsharma hit it pretty close.
There are still jumbo loans but there is an increase in rate to compensate for perceived (and real) increase in risk.
bob007, this is not a regulation change, it’s a change in the marketplace. The conforming loan limit has always been the maximum amount that the Government Sponsored Enterprises ( GSEs are FNMA or “Fannie Mae” and Freddie Mac … I forget the initials for old Fred) could purchase.
These entities were created to provide a secondary market for mortgage loans. The secondary market for loans above the conforming loan limit consists of many market participants, who are now scared of mortgage-backed securities and are either not buying the loans or are requiring much larger interest rate spreads to take on the risk.August 8, 2007 at 9:55 AM #71751bsrsharma
Participant“change in regulation ?”
It is not a change in regulation; It is market response to percieved risk.
The $417,000 is from here:
————————————————————
Office of Federal Housing Enterprise Oversight(OFHEO) 1700 G Street, NW 4th Floor
Washington, DC 20552Phone: (202) 414-3800 Fax: (202) 414-3823
NEWS RELEASE
FOR IMMEDIATE RELEASE
November 28, 2006
CONTACT :
Corinne Russell
(202) 414-6921
Stefanie Mullin
(202) 414-6376
2007 CONFORMING LOAN LIMIT TO REMAIN AT $417,000
Washington, DC ? Office of Federal Housing Enterprise Oversight Director James B. Lockhart today announced the maximum 2007 conforming loan limit for single-family mortgages purchased by Fannie Mae and Freddie Mac (the Enterprises) will remain at the 2006 level of $417,000 for one-unit properties for most of the U.S. 1
The conforming loan limit determines the maximum size of a mortgage that an Enterprise can buy or guarantee. By law the maximum conforming loan limit is based on the October-to-October change in the average house price in the Monthly Interest Rate Survey (MIRS) of the Federal Housing Finance Board (FHFB). The FHFB reported the decline in the average price was $501, or 0.16 percent, from $306,759 in October 2005 to $306,258 in October 2006. This is the first decline in the MIRS since 1992-93.
OFHEO announced November 15 it would keep the limit at 2007 levels if there was a decrease in October-to-October house prices and would defer that decline for one year.
This amount is in keeping with OFHEO’s recent announcement of an orderly and transparent process for any downward adjustment, said Lockhart. We made this decision so as not to disrupt the end-of-the-year pipeline of mortgages or the market for mortgage-backed securities, said Lockhart.
OFHEO also stated previously that additional guidance for the 2008 limits would be issued early next year.
Conforming Loan Limit Percentage Increase
2007 $417,000 0
2006 $417,000 15.9%
2005 $359,650 7.8%
Prior to this year’s decrease, the average increase in the FHFB survey over the previous five years
was 8.8 percent.
OFHEO assumed responsibility for establishing the conforming loan limit with a February 2004 guidance .
The conforming loan limit is based on the FHFB monthly survey and not OFHEO’s quarterly House Price Index (HPI), which will be released November 30.
OFHEO letters to Enterprises
###
1 Higher limits apply to Alaska, Hawaii, Guam and the U.S. Virgin Islands as well as to properties with more than one unit. See link OFHEO letters to Enterprises to letters to Enterprises
Citation Reference: 2007 CONFORMING LOAN LIMIT TO REMAIN AT $417,000 – November 28, 2006
View Full News ReleaseOFHEO’s mission is to promote housing and a strong national housing finance system by ensuring the safety and soundness of Fannie Mae and Freddie Mac
————————————————————August 8, 2007 at 9:55 AM #71867Participant“change in regulation ?”
It is not a change in regulation; It is market response to percieved risk.
The $417,000 is from here:
————————————————————
Office of Federal Housing Enterprise Oversight(OFHEO) 1700 G Street, NW 4th Floor
Washington, DC 20552Phone: (202) 414-3800 Fax: (202) 414-3823
NEWS RELEASE
FOR IMMEDIATE RELEASE
November 28, 2006
CONTACT :
Corinne Russell
(202) 414-6921
Stefanie Mullin
(202) 414-6376
2007 CONFORMING LOAN LIMIT TO REMAIN AT $417,000
Washington, DC ? Office of Federal Housing Enterprise Oversight Director James B. Lockhart today announced the maximum 2007 conforming loan limit for single-family mortgages purchased by Fannie Mae and Freddie Mac (the Enterprises) will remain at the 2006 level of $417,000 for one-unit properties for most of the U.S. 1
The conforming loan limit determines the maximum size of a mortgage that an Enterprise can buy or guarantee. By law the maximum conforming loan limit is based on the October-to-October change in the average house price in the Monthly Interest Rate Survey (MIRS) of the Federal Housing Finance Board (FHFB). The FHFB reported the decline in the average price was $501, or 0.16 percent, from $306,759 in October 2005 to $306,258 in October 2006. This is the first decline in the MIRS since 1992-93.
OFHEO announced November 15 it would keep the limit at 2007 levels if there was a decrease in October-to-October house prices and would defer that decline for one year.
This amount is in keeping with OFHEO’s recent announcement of an orderly and transparent process for any downward adjustment, said Lockhart. We made this decision so as not to disrupt the end-of-the-year pipeline of mortgages or the market for mortgage-backed securities, said Lockhart.
OFHEO also stated previously that additional guidance for the 2008 limits would be issued early next year.
Conforming Loan Limit Percentage Increase
2007 $417,000 0
2006 $417,000 15.9%
2005 $359,650 7.8%
Prior to this year’s decrease, the average increase in the FHFB survey over the previous five years
was 8.8 percent.
OFHEO assumed responsibility for establishing the conforming loan limit with a February 2004 guidance .
The conforming loan limit is based on the FHFB monthly survey and not OFHEO’s quarterly House Price Index (HPI), which will be released November 30.
OFHEO letters to Enterprises
###
1 Higher limits apply to Alaska, Hawaii, Guam and the U.S. Virgin Islands as well as to properties with more than one unit. See link OFHEO letters to Enterprises to letters to Enterprises
Citation Reference: 2007 CONFORMING LOAN LIMIT TO REMAIN AT $417,000 – November 28, 2006
View Full News ReleaseOFHEO’s mission is to promote housing and a strong national housing finance system by ensuring the safety and soundness of Fannie Mae and Freddie Mac
————————————————————August 8, 2007 at 9:55 AM #71875Participant“change in regulation ?”
It is not a change in regulation; It is market response to percieved risk.
The $417,000 is from here:
————————————————————
Office of Federal Housing Enterprise Oversight(OFHEO) 1700 G Street, NW 4th Floor
Washington, DC 20552Phone: (202) 414-3800 Fax: (202) 414-3823
NEWS RELEASE
FOR IMMEDIATE RELEASE
November 28, 2006
CONTACT :
Corinne Russell
(202) 414-6921
Stefanie Mullin
(202) 414-6376
2007 CONFORMING LOAN LIMIT TO REMAIN AT $417,000
Washington, DC ? Office of Federal Housing Enterprise Oversight Director James B. Lockhart today announced the maximum 2007 conforming loan limit for single-family mortgages purchased by Fannie Mae and Freddie Mac (the Enterprises) will remain at the 2006 level of $417,000 for one-unit properties for most of the U.S. 1
The conforming loan limit determines the maximum size of a mortgage that an Enterprise can buy or guarantee. By law the maximum conforming loan limit is based on the October-to-October change in the average house price in the Monthly Interest Rate Survey (MIRS) of the Federal Housing Finance Board (FHFB). The FHFB reported the decline in the average price was $501, or 0.16 percent, from $306,759 in October 2005 to $306,258 in October 2006. This is the first decline in the MIRS since 1992-93.
OFHEO announced November 15 it would keep the limit at 2007 levels if there was a decrease in October-to-October house prices and would defer that decline for one year.
This amount is in keeping with OFHEO’s recent announcement of an orderly and transparent process for any downward adjustment, said Lockhart. We made this decision so as not to disrupt the end-of-the-year pipeline of mortgages or the market for mortgage-backed securities, said Lockhart.
OFHEO also stated previously that additional guidance for the 2008 limits would be issued early next year.
Conforming Loan Limit Percentage Increase
2007 $417,000 0
2006 $417,000 15.9%
2005 $359,650 7.8%
Prior to this year’s decrease, the average increase in the FHFB survey over the previous five years
was 8.8 percent.
OFHEO assumed responsibility for establishing the conforming loan limit with a February 2004 guidance .
The conforming loan limit is based on the FHFB monthly survey and not OFHEO’s quarterly House Price Index (HPI), which will be released November 30.
OFHEO letters to Enterprises
###
1 Higher limits apply to Alaska, Hawaii, Guam and the U.S. Virgin Islands as well as to properties with more than one unit. See link OFHEO letters to Enterprises to letters to Enterprises
Citation Reference: 2007 CONFORMING LOAN LIMIT TO REMAIN AT $417,000 – November 28, 2006
View Full News ReleaseOFHEO’s mission is to promote housing and a strong national housing finance system by ensuring the safety and soundness of Fannie Mae and Freddie Mac
————————————————————August 8, 2007 at 10:22 AM #71772Alex_angel
ParticipantWon’t most if not all home loans in SD be a Jumbo since most people even with 20% down still will be above $417k?
August 8, 2007 at 10:22 AM #71889ParticipantWon’t most if not all home loans in SD be a Jumbo since most people even with 20% down still will be above $417k?
August 8, 2007 at 10:22 AM #71897ParticipantWon’t most if not all home loans in SD be a Jumbo since most people even with 20% down still will be above $417k?
August 8, 2007 at 10:36 AM #71793Participant“Won’t most if not all home loans in SD be a Jumbo since most people even with 20% down still will be above $417k?”
Only in recent past. Not so pre-bubble. So this is another Tip of the Spear in puncturing (more like bursting) the bubble. No money -> No buyer -> price has to climb down, else the seller will sit on it till time does its job (either by inflation or death).
August 8, 2007 at 10:36 AM #71910Participant“Won’t most if not all home loans in SD be a Jumbo since most people even with 20% down still will be above $417k?”
Only in recent past. Not so pre-bubble. So this is another Tip of the Spear in puncturing (more like bursting) the bubble. No money -> No buyer -> price has to climb down, else the seller will sit on it till time does its job (either by inflation or death).
August 8, 2007 at 10:36 AM #71919Participant“Won’t most if not all home loans in SD be a Jumbo since most people even with 20% down still will be above $417k?”
Only in recent past. Not so pre-bubble. So this is another Tip of the Spear in puncturing (more like bursting) the bubble. No money -> No buyer -> price has to climb down, else the seller will sit on it till time does its job (either by inflation or death).
August 8, 2007 at 10:38 AM #71799gn
ParticipantWon't most if not all home loans in SD be a Jumbo since most people even with 20% down still will be above $417k?
Yes. That's why the next 2 years will bring the RE market to its knees.
August 8, 2007 at 10:38 AM #71916ParticipantWon't most if not all home loans in SD be a Jumbo since most people even with 20% down still will be above $417k?
Yes. That's why the next 2 years will bring the RE market to its knees.
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