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Friday, March 7th, 2008 at 2:29 AM

Dick Says Lower Rates

 My fellow REALTORS®:

        I know you’ve all been waiting for some relief to our current market conditions, and it arrived today: the new FHA and Fannie Mae- Freddie Mac conforming loan limits have been released by the U.S. Department of Housing and Urban Development.

        To find out the new limits in your area, simply click on this link: https://entp.hud.gov/idapp/html/hicostlook.cfm, which will take you to the “mortgage limits” page at the HUD web site. On that page, enter your state and county information, chose the type of loan from the “Limit Type” drop-down box (FHA Forward, Fannie/Freddie or HECM). [Note: FHA Forward is what HUD is calling the temporary FHA loan limit.] Then click the “send” button at the bottom of the page. On the results page, you’ll see the new loan limit for the type of loan you selected for your area. You can also find a county-by-county listing of the new FHA and Fannie Mae-Freddie Mac loan limits at REALTOR.org by following this link:
http://www.realtor.org/GAPublic.nsf/files/chart_hud_loan_limits_08.pdf/$FILE/chart_hud_loan_limits_08.pdf         The new loan limits for FHA and Fannie Mae and Freddie Mac are now calculated at 125 percent of the HUD published median prices, with a floor of $271,050 and $417,000, respectively, not to exceed $729,750.

        We expect the impact of these loan limit increases on the housing market to be significant because of the infusion of capital into the mortgage market, which should result in lower interest rates across the board. In addition, there will be a direct impact on high-cost areas that previously required borrowers to take out costlier jumbo mortgages.

        As NAR research points out, increasing FHA loan limits will help an additional 138,000 Americans achieve the dream of home ownership and will allow nearly 200,000 homeowners to refinance and potentially keep their home. In addition, NAR believes that increasing the loan limits for Fannie Mae and Freddie Mac will bolster the housing finance market, which continues to be severely stressed, by providing an immediate infusion of much needed liquidity to the nation’s mortgage market.

        An economic impact study conducted by NAR in January 2008 estimated that increasing the GSEs’ conforming loan limits would result in as many as 500,000 refinanced loans and could help reduce foreclosures by as much as 210,000. In addition, over 300,000 additional home sales could be generated, housing inventory would be reduced and home prices would be strengthened by two to three percentage points.

        HUD was mandated in the Economic Stimulus Act to publish new loan limits within 30 days of the bill’s signing by President Bush on February 13. NAR strongly supported this economic stimulus package because of the relief we felt it would bring our members.

Posted on Friday, March 7th, 2008 at 2:29 AM in Unbelieveable | 14 Comments » | Print Print You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

Reader Comments: 14 Responses

  1. I wanted to record this quote to see how they turn out – any guesses on accuracy?

    Jumbo 30-year fixed rates are back to 7% today Dick, do your magic.

    Jim the Realtor | March 7th, 2008 at 2:34 am

  2. Now you can pay 6% instead of 7% for jumbo

    Monthly payment: 30 Years
    Interest rate: 6.000%
    Loan amount: $ 700,000.00
    $ 4,196.85 a month

    Result:
    Monthly payment: 30 Years
    Interest rate: 7.000%
    Loan amount: $ 700,000.00
    $ 4,657.12 a month

    $450 free money, that translates to almost $70,000. So did home prices on the coast go up 10% today???

    Equalizer | March 7th, 2008 at 2:43 am

  3. Dick Gaylord… what a tool.

    Tyrone | March 7th, 2008 at 2:51 am

  4. Why would ‘liquidity’ make a difference – does he think buyers will now pay more tha they would yesterday, just because loan limits went up?

    You know the used-to-be-jumbo loans are going to have higher than conforming rates – there will be a two-tier rate package, or they’ll all be higher.

    Another swing and a miss by the US government.

    Jim the Realtor | March 7th, 2008 at 3:05 am

  5. Always amusing how those NAR idiots miss the mark…

    "AP
    Housing Market Spirals, No End in Sight

    Thursday March 6, 5:30 pm ET
    By J.W. Elphinstone, AP Business Writer

    Low Home Equity, Record-High Foreclosures: a Limp Housing Market Looks Even Weaker
    "

    SMC | March 7th, 2008 at 3:06 am

  6. Liquidity drove prices up during the boom, so why not now? :)
    Seriously, wouldnt demand go up now and keep prices from falling?

    Equalizer | March 7th, 2008 at 3:09 am

  7. In theory, liquidity would make a difference if all else were equal. But I don’t think buyers are satisfied that prices are right yet, and until that changes, nothing else will matter much.

    But maybe the NAR is right? If they had a sliver of credibility it would help – but does any one believe anything they say? Most believe the opposite.

    Jim the Realtor | March 7th, 2008 at 3:14 am

  8. "As NAR research points out, increasing FHA loan limits will help an additional 138,000 Americans achieve the dream of home ownership…"

    They just can’t resist throwing in the smoke-blowing crap, and the marketing spin.

    Aztec | March 7th, 2008 at 4:49 am

  9. Does it really matter? How many buyers out there can document their income and still qualify under sane guidelines at current prices?

    Blink | March 7th, 2008 at 4:54 am

  10. Infusion of liquidity to help the housing market? Really? Take a look at what the FED cutting rates did for the stock market. Every time Ben opens his mouth the market falls.

    On the plus side I continue to make a small fortune on the real estate/financial shorts. They can burn the whole bitch down for all I care. People leveraged on the way up; I’ll do the same on the way down.

    Genius | March 7th, 2008 at 6:41 am

  11. Are they now going to issue stated income, negative am loans to the non-conforming limits. If they are not the amount of buyers who can qualify for the loans is still limited. How many people have the income to afford an all in home payment of $5,000? I di not think the NAR has ever put income in any of their calculations.

    LV Renter | March 7th, 2008 at 3:00 pm

  12. We refi’d our mortgage in January, a whopping five months after closing on the house, and lowered our rate by .625. The current rates are .125 higher than our "lowered" rate. I’ll let you know when our rate watch shows sufficiently "lower rates across the board" to do it again.

    I told my wife last year that I expected to be able to refi at least .5 lower by Nov 2008 because of the traditional presidential election year goosing of the money supply as the incumbent party in the White House tries to hang onto power; January seemed a bit early for this to happen, but I think that may have been it for this year.

    GeneK | March 7th, 2008 at 3:23 pm

  13. Rates on all GSE sponsored mortgages are up 1/2 point in the last 3 days due partially to this change. This change has hurt the average home buyer while only helping the 500-725K value range.

    Westparker | March 7th, 2008 at 5:08 pm

  14. What a bunch of morons in the REIC. Good luck finding enough stupid ignorant buyers who will meet the requirements for a conforming fully amortized loan. Oh yeah, and all those rate cuts that Bernanke executed…what effect did that have on long term rates again?

    Idiots…you know who you are.

    Jwm in SD | March 9th, 2008 at 1:52 pm

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