As reported in the LA Times yesterday the economic stimulus package has been approved by both the House and the Senate and is on its way to the President for his signature. This means that we should be seeing larger conforming loan limits in the near future. It appears that we will also see rates on those loans rise from their current levels as investors deem them to be riskier. It's always something...
Those of us in the higher priced markets just can't seem to catch a break. For years we have not been able to take advantage of any government backed loan program.. certainly not FHA or VA let alone make use of conforming loan limits to buy property. The claim has always been that our market is too risky. Did it ever occur to someone that if we didn't have to be so creative trying to get at least part of a loan at a decent rate we might not be so risky? Who decided that $417,000 was a safe bet but $480,000 was too high?
Those of us in the higher priced markets just can't seem to catch a break. For years we have not been able to take advantage of any government backed loan program.. certainly not FHA or VA let alone make use of conforming loan limits to buy property. The claim has always been that our market is too risky. Did it ever occur to someone that if we didn't have to be so creative trying to get at least part of a loan at a decent rate we might not be so risky? Who decided that $417,000 was a safe bet but $480,000 was too high?
Home Prices are higher in California then in the mid-west. The median salary in CA is higher then the median salary in most of the mid-west. Yet California and other high priced areas can only have access to loans that are tied to the price of homes in the mid-west.. Baloney! It's policies like these that help make markets that cater to the creative use of money. Once you start being creative you are usually headed for trouble.
Let's hope the new conforming loans limits of $729,750 in California will help homeowners who need to refinance have an easier time and more access to money. This isn't a bailout.. people will have follow stricter regulations about qualification. However it is a start to some fairness for the California real estate market and may lead to fewer problems in the future.
UPDATE: 3/06/2008
The government made it official today.. conforming rates will rise in LA County to $729,750
