Ah yes, the sweet, sweet smell of pork comes wafting across the country from Washington D.C. where, CAR informs us, the final Stimulus Package bill includes increased conforming loan limits — a feature that had earlier been in danger of not making it through. The CAR press release:
Thanks in part to lobbying by C.A.R. and NAR members, the Senate passed their version of an economic stimulus package today, Thursday, February 07, 2008. The Senate version expands rebate checks for seniors and disabled veterans and includes the same increases to the conforming loan limits for both GSE and FHA found in the House stimulus package. The House just passed the Senate version of the bill and it will now be sent to the White House. The President is expected to sign the legislation by the end of next week, ahead of the Congressional self-appointed deadline of February 15th. The increase in the conforming loan limits will last through 2008, but C.A.R. and NAR continue to lobby for FHA and GSE reform, making these increases permanent.
Interpretation: it’s an election year and the national debt already has more digits than a centipede, so what’s another couple of gazillion bucks?
As soon as this bill passes, expect a wave of re-financing for folks in California and other high-priced states who weren’t able to qualify for conforming loans at the old limit of $417K, but will now qualify with the higher limit of some $700K. Given that the delta between interest rates on conforming and Jumbo loans is a full percent or more, that could spell big relief for some.
Problem is: Will the typical homeowner who benefits from this actually squirrel away the extra couple of hundred bucks, or instead blow it on more toys?
Other commentary:
- theFrontSteps modestly shuns credit for the bill’s passage.
- SocketSite hosts a lively comment debate on the topic.
Tags: Conforming Loans, Consumer, Election Year Shenanigans, Industry, Jumbo Loans, Mortgage, Politics, Pork
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5 responses so far ↓
1 Jeff Brown // Feb 7, 2008 at 11:05 pm
The increased conforming loan limits will be a boon for San Diego. Though our firm deals in investment property, my house buddies will be elated when this becomes law.
Even with only 10% down, this works with homes priced at around $775K. In San Diego these days, that’s more than 50% over median.
It should prove interesting.
2 Lola Audu // Feb 8, 2008 at 11:02 am
I’m not keen on betting…so, I’ll make a prediction. The average home owner will probably take the savings & blow it on toys. Reference the latest Business Week poll which indicates that between 70-80% of Americans believe their homes are either staying the same OR increasing in value.
The average home owner does not yet really seem to understand how severe the problem in the housing market truly is. Government quick fixes are doing little to change this unfortunate diversion from reality.
3 Athol Kay // Feb 9, 2008 at 9:24 am
We’re going to Disneyworld!
4 Phil Hoover // Feb 9, 2008 at 11:39 am
Personally, I am having considerable difficulty getting excited about my guvmint sending me back a few hundred dollars of my own money.
5 Free Real Estate Blogs // Feb 9, 2008 at 2:41 pm
Election year is right. We’ve got quite a few economic forces / election year forces / mortgage debacle forces … at play here… strange times.
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