New conforming loan limits

I'm sure the realtors will love this news. The American Recovery and Reinvestment Act of 2009 has been approved and under this act the conforming loan limits are changing. Similar to what happened last year when they raised the limits. The question is will banks loan at the new limits. The last time they didn't and anything over $417k was still coming in at jumbo interest rates approx 2% higher than those loans under $417k.

Under the new guidelines the conforming loan limit for both Riverside and San Bernardino counties will be $500k. This will offer a glimmer of hope that the government can help to levitate prices. Best of luck with that!

It remains to be seen if lenders will actually offer loans of $500k at the lower conforming rates. I check this evening and I couldn't find any. Under $417k I could find 4.625% over $417k the rates jumped to 7%. That's a helluva spread!

BTW, one of the people I carpool with just refi'd at 4.25%!! (30 yr fixed).

And in other news the California state government passed another bill to try and slow the foreclosure process. California AB 7 adds another 90 days to the current 90 days after an NOD is filed before the lender can take the property back.

To me this seems like a non-issue since most lenders are already taking far longer than 6 months to auction the properties off. I don't think this will have any effect on the numbers for a year or more.

It does however show just how out of touch the government is. 70% of sales in Riverside and much of the state, are foreclosures. If they could eliminate or reduce that amount the sales numbers would more than likely tank again. Foreclosures are the only thing keeping realtors, mortgage brokers and construction workers from the unemployment line.

If anyone at the NAR or CAR had a functioning brain cell left in their head, they would be doing everything they could to speed up the foreclosure process. They are the only thing selling, you would think they would want more of them, not less.