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Location: central, between Pepe's Tacos and Roberto's
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Quote:
Originally Posted by christeen
Ok, just read an article on bankrate.com and re-reading renriq02 posts, I think I'm starting to understand . . .
So Fannie/Freddie are the government sponsored companies that buy the loans and loans falling under their guidelines are "conforming loans." Loans above their limits are Jumbo loans. Lenders traditionally set lower interest rates for conforming loans than Jumbo loans since they can resell them to Fannie/Freddie.
FHA loans are loans insured by the federal government. FHA-insured mortgages are usually at lower interest rates than non-FHA insured since theyr'e government insured. On the link you gave, the "FHA Forward" is the limit for FHA loans.
Did I get that right? And what is HECM?
100% correct. HECM is Home Equity Conversion Mortgage, basically FHA reverse mortgage. HECM's are unaffected by this increase.
Location: central, between Pepe's Tacos and Roberto's
2,086 posts, read 6,846,583 times
Reputation: 958
Quote:
Originally Posted by renriq02
I dont do HECM's , but i read somewhere that they went up as well
According to Peter Bell, president of the NRMLA, HECM's were specifically excluded from the economic stimulus bill to keep it from bogging down in the Senate. The avenue that the NRMLA is using to try and create a nationwide limit of $417K for HECM's is the FHA Modernization Act. This is the latest as of about 3 weeks ago, and I have heard nothing further. However, these new limits may apply to Homekeeper RM's but there has been no clarification, and of course there are always proprietary RM's for those that need higher limits.
90% LTV on fixed, 80% on ARMS (75% for a re-fi). Add another 5% in declining markets.
Min 660 FICO, 700 if the LTV is greater than 80%.
.25 (fixed) or .75 (ARM) price premium over non-jumbo conforming
Full doc only.
Buyer must put at least 5% of their own funds as down payment.
For all 3 of the people that qualify, this is great news
90% LTV on fixed, 80% on ARMS (75% for a re-fi). Add another 5% in declining markets.
Min 660 FICO, 700 if the LTV is greater than 80%.
.25 (fixed) or .75 (ARM) price premium over non-jumbo conforming
Full doc only.
Buyer must put at least 5% of their own funds as down payment.
For all 3 of the people that qualify, this is great news
So what you are saying is that you want to see a return to the non-existant lending guidelines of 3 years ago? Considering the risk involved on this level, I would say that these guidelines are a very good measure to make sure that this is not abused. I would like to see a higher LTV on the non-cashout refi's (this is supposed to help current homeowners after all), but I see no problem with this news. Many people will actually qualify for this. The people that don't qualify for this probably shouldn't have qualified for the easy credit in the past either.
I think that we are seeing a return to responsible homeownership. If you can't afford to save up for a down payment (especially if you can afford a $4000 a month mortgage payment) then you, IMO, are not financially responsible enough for the privilege of homeownership.
So what you are saying is that you want to see a return to the non-existant lending guidelines of 3 years ago?
Nah, just saying that the big deal made about the higher limits is mostly political posturing with little chance of having any real effect in the markets that were changed. Freddie/Fannie did the right thing and make these hard to qualify for - as any loan for three quarters of a million dollars should be. It'll help a few people who weren't going to default on their loans anyway, and be no different at all for the people who are underwater and dragging the markets down.
But at least the politicians got to pretend to do something about the problem.
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