Conforming Loan Limits Extended For 2010

I know that many folks are supportive of this latest move by the government to help the housing market. I suppose it won't hurt anything, but I'm still trying to figure out if it helped anything here in Santa Barbara over the last year.

I don't believe any of the lenders I am familiar with have ever treated a loan between $417,000 and $729,000 as a conforming loan. They treat them as Jumbo Conforming which is an entirely different animal when it comes to the rate.

I believe that some of the increase we have experienced in the lower price points in our market are due to excellent loan rates below $417,000. I also believe that the higher rates over $417,000 have hampered the housing market above $500,000 in Santa Barbara.

Tell me what you think!

For additional reading
New Conforming Loan Limit Has Too Many Strings
Wild, Wild West: California Cold To 'Jumbo Conforming' Loans

The State of Home Financing in Santa Barbara

Our escrow staff was fortunate enough to have a loan professional come talk to us at our meeting this morning. I wasn't really sure how well it would go, but it was a terrific forum for us to share what we are seeing on our escrows as well as hear what type of financing is out there.

I wasn't sure that the raising of the conforming loan limit that happened with the economic stimulus package had really helped people who were borrowing between the old limit and the new limit of $729,750 but it is.

If you are wanting to put less than 20% down on a piece of property and aren't needing to borrow more than the new limit an FHA loan has some possibilities for you. We were even told that there are some down payment assistance programs you can use in conjunction with this financing that could really lower your down payment.

We were told that there are still some sources for loans between 2 and 5 million although people who borrow these amounts usually do it for a short time since their isn't any tax benefit.

This lender also told us that they are not viewing Santa Barbara as a declining market any more and they will loan you over 1.1 million with 20% down.

There were some comments made about home equity loans being frozen and we found out that with this lender even though you may have received a nasty letter from them, if you get in touch with them they have been able to unfreeze your line. They can even help you put on a new HELOC.

One other interesting product that was mentioned is the construction to permanent loan program they have. With between 20 and 30% down a buyer can purchase a tear down and as an example get a 1.5 million dollar construction loan on a $750,000 purchase price.

I left our meeting thinking that many folks don't understand the opportunity that is out there. The opportunity buyers who need to borrow less than the $729,750 when purchasing a property could come to an end this year. If you need more information, just shoot me an email and I'll let you know who to contact.

Spread the word!

Conforming Loan Limits Permanent?

I received an email the other day that spelled out a campaign that the National Association of Realtors has begun.

The conforming loan limits that went in to place earlier this month are not intended to stay in place permanently. They are scheduled to roll back to the previous numbers on January 1st 2009.

The National Association of Realtors is asking for FHA Reform Now!

They are stating that the new conforming loan limits are showing evidence that they are providing stability, liquidity and security in to the housing market.

They have created a sample letter that can be used to send to you elected officials, like Lois Capps and Barbara Boxer or Dianne Feinstein in California.

One thing I think is going to challenge this campaign is that it appears on the surface to be self serving. I don't really think this is the case.

Real Estate agents would benefit from a quicker turn around in the housing market, but I think the people that are being hurt most are actual homeowners who are struggling to figure out how to keep their homes.

With the increased limits they would appear to have more options when it comes to financing. Below is the exact verbiage from the email I received.

See You In Escrow!

CALL FOR ACTION
FHA REFORM
HELP KEEP THE NEW CONFORMING LOAN LIMITS PERMANENT
Our new conforming loan limits are scheduled to expire at the end
of 2008. Help keep these new limits permanent by answering this
Call for Action. Please follow this link
(http://takeaction.realtoractioncenter.com/campaign/fha_marketreform/)
and send your elected representatives a letter explaining that we
need these new conforming loan limits permanent.

Good News For Santa Barbara County Real Estate

As some of you may know, the conforming loan limit for Santa Barbara County was going to be raised as part of the Economic Stimulus Package.

It was only going to be raised to $587,500 because the median price for the county was being severely affected by the lower home prices in the Santa Maria and Lompoc areas.

After finding this out the Santa Barbara Association of Realtors began a campaign to write letters to our elected officials to make them aware of this situation.

The Mayor of Santa Barbara and Council Members reached out to their contacts in Washington to help stimulate the change. No matter what had happened I have to give some positive feedback to Mayor Blum. She answered emails and was very approachable.

The information got in to the right hands, and Lois Capps and others picked up the banner.

Lois Capps even wrote a response to a letter I wrote that Noozhawk was nice enough to publish.

Now the next step is to see if these new loan limits will reflect a reduction in interest rates.

Either way, this is a very good start to helping the property owners in our county. This will give buyers some additional options when it comes to financing. It should also give anyone who is needing or wanting to refinance those same options.

CNN has a pretty good explanation of what has been approved so far as well as some comments from HUD.

Lois Capps has an more information on her site regarding how the Economic Stimulus Package will work.

See You In Escrow!

Santa Barbara's Conforming Loan Limits Not Good Enough!

I have pasted the text of an email sent out by the Santa Barbara Association of Realtors below.

I definetely agree that for Santa Barbara's South Coast to have the same conforming loan limit as Santa Maria and Lompoc doesn't make sense.

I have heard that the loan limit for Ventura County would be the mimum of $729,500 if it is figured by county.

So join the campaign of letter writers who are going to try and send the message to our elected officials that from Carpinteria to Goleta our conforming loan limit should be raised.

Let Lois Capps, and Barbara Boxer, and the organizations listed below know that this should be considered a seperate area when it comes to figuring the new conforming loan limits.

This issue could affect pricing and the number of homes that end up in foreclosure, which affects everyone in Santa Barbara.

You can download the letter from the Association's site referenced below.

Stimulus Package will NOT help Santa Barbara!

South Santa Barbara County (Goleta, Santa Barbara, Montecito, and
Carpinteria) is lumped with North Santa Barbara County (Santa Maria, Lompoc and Santa Ynez) which means a $587,500 maximum loan instead of a $729,500 maximum loan. We need to split the calculations for the county.
Help us contact our Congresswoman, Senators, HUD, OFHEO, Freddie Mac, and Fannie Mae and ask them to split north and South County
for purposes of calculating conforming loan limits.

Thank you for making a difference!

Please visit
http://sbaor.com/displaycommon.cfm?an=1&subarticlenbr=32
to see more information about this and to download the letter.

For further information please contact:

Krista Pleiser
Government Affairs Director
Santa Barbara Association of REALTORS®
1415 Chapala St, Santa Barbara, CA 93101
805-963-3787 office
805-884-8609 direct
805-966-9664 fax
GAD@sbaor.com
For more information visit: www.sbaor.com