Blog of the Mortgage

The Stimulus Package will be signed today.
BUT WAIT. . . There's more.
Some of you may remember my post from a couple of weeks ago about MBS Traders Spurning higher conforming loan limits as well as James Lockhart head of O.F.H.E.O telling anyone who would listen that he doesn't like higher conforming limits. Read the post here:
Well Today we had information from SunTrust banks (I know, they're a competitor but the capital markets opinion is valid across the board) Director of Capital Markets saying exactly that.
Included are time frames and costs to originate etc.
Also: the loan product set for increased limits:
30, 15 Fixed Only. Likely only 90% LTV/CLTV. If any ARM is coming it would only be one (not all) such as a 5/1.
So, we still have a long way to go. Today the Stimulus Bill gets signed, and the waiting period begins.
It could only take 30 days to allow the higher limits but it could also take up to 90 days for implentation by FNMA, FHLMC and Ginnie Mae to allow for the securization models, pricing engines, AUS engines etc to be updated fully.
Most importantly: I have posted an excel sheet with data on the statment below.
It gives US a new Opportunity with bigger loan limits!

We're talking 125% of Median Sales price for : Sonoma, Alameda, Contra Costa, Solano, Napa etc.
Marin, San Mateo and Santa Clara will likely get capped at $729k for FHA and $729k GSE's as well. The math here is Maximum of 175% of current conforming limits : $417k x 175% (This is the absolute ceiling on these loan limits).

To see how it will work though you're going to have to go to Education Station and read the last couple of posts there.
Check them out and then Float your Loans in to close this month!

Posted by Raoul Badde on February 13th, 2008 10:14 AMPost a Comment (0)

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