[bsrsharma]

“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).

[bsrsharma]

“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).

[bsrsharma]

“take the factories from China”

Have you ever moved? (Well we did recently – it wasn’t easy or fun). What about trained workers? access to raw materials and components suppliers, subcontractors, infrastructure etc., Like it or not, we are going to be in this marriage with China for a long time – with China as the our factory/bank, US as the leading consumer/debtor. It is like you and your credit card. You may not love it, but can’t live without it.

[bsrsharma]

“take the factories from China”

Have you ever moved? (Well we did recently – it wasn’t easy or fun). What about trained workers? access to raw materials and components suppliers, subcontractors, infrastructure etc., Like it or not, we are going to be in this marriage with China for a long time – with China as the our factory/bank, US as the leading consumer/debtor. It is like you and your credit card. You may not love it, but can’t live without it.

[bsrsharma]

“take the factories from China”

Have you ever moved? (Well we did recently – it wasn’t easy or fun). What about trained workers? access to raw materials and components suppliers, subcontractors, infrastructure etc., Like it or not, we are going to be in this marriage with China for a long time – with China as the our factory/bank, US as the leading consumer/debtor. It is like you and your credit card. You may not love it, but can’t live without it.

[bsrsharma]

“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

http://www.ofheo.gov

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 Release

OFHEO’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
————————————————————

[bsrsharma]

“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

http://www.ofheo.gov

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 Release

OFHEO’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
————————————————————

[bsrsharma]

“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

http://www.ofheo.gov

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 Release

OFHEO’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
————————————————————

[bsrsharma]

They can’t sell Jumbos to Government Sponsered Enterprises (GSEs – Federal National Mortgage Association – FNMA – Fannie Mae and Federal Home Loan and Mortgage Corporation (Freddie Mac)). With no demand in secondary market for these loan, all mortagage issuers will quickly run out of funds. Mortgage issuers act as circulating pumps converting mortgages to investment securities. Since there are no buyers for these securities (due to fear of defaults/devaluation due to home price deflation), there are no Jumbo loans.

You are just seeing almost all market for $500K and above properties go up in a flash. This is going to be a bigger deal than subprimes. Now, all homes except the multimillion $ wealthiest estates are valued @ about $500K due to the magic of mortgage availability.

[bsrsharma]

They can’t sell Jumbos to Government Sponsered Enterprises (GSEs – Federal National Mortgage Association – FNMA – Fannie Mae and Federal Home Loan and Mortgage Corporation (Freddie Mac)). With no demand in secondary market for these loan, all mortagage issuers will quickly run out of funds. Mortgage issuers act as circulating pumps converting mortgages to investment securities. Since there are no buyers for these securities (due to fear of defaults/devaluation due to home price deflation), there are no Jumbo loans.

You are just seeing almost all market for $500K and above properties go up in a flash. This is going to be a bigger deal than subprimes. Now, all homes except the multimillion $ wealthiest estates are valued @ about $500K due to the magic of mortgage availability.

[bsrsharma]

They can’t sell Jumbos to Government Sponsered Enterprises (GSEs – Federal National Mortgage Association – FNMA – Fannie Mae and Federal Home Loan and Mortgage Corporation (Freddie Mac)). With no demand in secondary market for these loan, all mortagage issuers will quickly run out of funds. Mortgage issuers act as circulating pumps converting mortgages to investment securities. Since there are no buyers for these securities (due to fear of defaults/devaluation due to home price deflation), there are no Jumbo loans.

You are just seeing almost all market for $500K and above properties go up in a flash. This is going to be a bigger deal than subprimes. Now, all homes except the multimillion $ wealthiest estates are valued @ about $500K due to the magic of mortgage availability.

[bsrsharma]

“only when the tide goes out do you discover who’s been swimming naked”

Describes this decade well. Interesting apposition to “A rising tide lifts all boats” of the 1990s.

[bsrsharma]

“only when the tide goes out do you discover who’s been swimming naked”

Describes this decade well. Interesting apposition to “A rising tide lifts all boats” of the 1990s.

[bsrsharma]

“only when the tide goes out do you discover who’s been swimming naked”

Describes this decade well. Interesting apposition to “A rising tide lifts all boats” of the 1990s.

[bsrsharma]

“close on a house (with a domestic underwriter) and instant-citizenship”

I hope this is in jest. Should Citizenship be that devalued? The very thought of selling Citizenship for money seems abhorrent to me. It is one thing to allow foreigners to buy property and live here but giving political rights without concomitant allegiance borders on treason. I can understand the cynicism towards the value of Citizenship engendered by illegal immigration; but to accept defeat so brazenly seems shameful.

[Author]

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