Maximum Loan Limits Extended for Conforming Loans
The federal government recently extended through 2010 the maximum dollar amount for “conforming loans.” This will probably mean better options for borrowers who might otherwise have had to take out “jumbo” loans. For the past two years, the government has, through Fannie and Freddie, agreed to buy mortgages of $729,500 or less for properties in high-cost housing areas like Manhattan and parts of northern New Jersey. That ceiling was scheduled to be lowered to $625,500 at the end of this year, but last month Congress extended the higher limit through the end of 2010. Representative Barney Frank, the Massachusetts Democrat who is chairman of the House Financial Services Committee, said in an interview that he planned to introduce legislation next year raising the maximum F.H.A. loan by $100,000, to $839,750. His bill would make the new limits permanent.
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3 Responses to “Maximum Loan Limits Extended for Conforming Loans”
raupman Says:
Posted on December 8th, 2009 at 9:35 am
That seems like very good news.
How could people in our area use this to capture that benefits of the best-possible financing options for real estate, while still ensuring we don't become ensnared by preditory lenders or other complicated legal aspects of real estate that most people don't usually think of?
erictheattorney Says:
Posted on December 10th, 2009 at 5:29 pm
If you are considering a real estate purchase, among the first issues that will need to be addressed is financing. A wide variety of mortgage options are available in the financial market today, making it necessary for consumers to educate themselves on the differences between them in order to secure the best possible mortgage loan for their circumstances. Shopping for a mortgage takes time and effort. Choosing the wrong mortgage can be very costly. It could lead to the loss of your home if you can’t afford the payments.
Several new federal consumer protection rules listed below will increase the likelihood of finding a fair mortgage that you can afford for many years. These recent rules recognize that disclosures alone cannot always protect mortgage borrowers from the harm caused by unfair and abusive lending practices or predatory lending.
#1) For home mortgage loans (not including home equity lines of credit), mortgage lenders and brokers are prohibited from coercing or encouraging real estate appraisers to misrepresent the value of a home. This is intended to ensure the integrity and accuracy of an appraisal, so that a consumer is not overpaying for a home or borrowing more money than the home is worth.
#2) Mortgage loan servicers (companies that collect mortgage payments and perform other duties for lenders) are prohibited from engaging in these unfair actions: (a) failing to credit a loan payment on the date it is received; and (b) deducting a late-payment fee from a loan payment without informing the borrower and thereby creating a shortage that triggers additional fees for the borrower, month after month, even when the next loan payments arrive on time.
#3) For mortgages with a relatively high interest rate typically because the applicant is considered a subprime credit risk, the new rules contain these protections: (a)a lender is prohibited from making a higher-priced loan without regard to a borrower’s ability to repay from income and assets other than the home’s value; (b)lenders of higher-priced mortgages are required to verify a loan applicant’s income and assets using reliable, third-party documents and not based on the word of the borrower.; and (c)in certain cases, the lender cannot impose a prepayment penalty if the borrower pays a loan off early.
#4) The U.S. Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (the SAFE Act) requires mortgage loan originators — including loan officers at financial institutions and independent mortgage brokers — to register with the government and enter information about their background and disciplinary history into a central database that consumers can access. The SAFE Act is intended to enhance consumer protections and reduce fraud in the residential mortgage industry.
Before committing to a mortgage that is too complicated to understand, you should seek the advice of a real estate attorney or a trained, reputable housing counselor. You can find a counselor at NeighborWorks America (www.nw.org) or by calling 1-888-995-HOPE. For a referral to a local HUD-certified counseling agency, visit http://www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm or call 1-800-569-4287.
Power washing Dragon and Painting -PDP. Says:
Posted on December 11th, 2009 at 1:09 pm
Mr Habib, I can understand why you would be exited about the late breaking news that Congress recently passed a congressional resolution extending the limits on conforming loans. This, more than anything, will allow familes who couldn't afford to buy a home otherwise to enter a buyer's market. Our economy needs conitnued smart injections like this to really stimulate growth, and if the extensions become permanent this shot in the arm will help, even more, to turn things around in the real estate game. The trickle down from this can spell much needed relief in the construction indusrtry as well. I know I'm psyched
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