Update to new conforming limits

From: Broker Universe



Belinda Austin of San Diego CAMB attended a panel discussion put on by the California Association of Mortgage Brokers on the economic stimulus package on Friday, Feb. 29, 2008. John Sayre, Vice President of Residential Lending for Fannie Mae and Nancy West from The US Department of Housing and Urban Development were in attendance as panel members.

Mr. Sayre confirmed that the new loans would be called Conforming Jumbo (yes it is an oxymoron and he is aware of that).

He confirmed the following for the new Conforming Jumbo Loans:

They will be traded in a separate investment pool from normal conforming loans of $417,000 and under.

There will be a marginal price hit for Conforming Jumbo loans but he assured us that the hit will not negate the entire point of the stimulus package as it will be more competitive than current jumbo pricing.

Loans must be funded and closed by Dec. 31, no exceptions at this point unless Congress extends deadline.

Conforming Jumbo loans will have more strict underwriting guidelines than normal conforming loans.

IMPORTANT: Fannie Mae is due to release the letter to the lenders stating the new terms no later than FRIDAY, March 7 (please keep in mind that per the bill’s provision they have until March 14 but he specifically said tomorrow!)
IMPORTANT: The lender letter will available on Fannie Mae’s website for the public at large to view http://www.fanniemae.com/index.jhtml

IMPORTANT: Fannie and Freddie will not start buying the new Conforming Jumbo loans on the secondary market for 60 days (from Feb. 29) – I asked the all important question of when these loans could be originated and HE STATED THAT LENDERS ARE FREE TO OFFER THESE PRODUCTS IMMEDIATELY UPON ISSUANCE OF THE FANNIE MAE LENDER LETTER!
Ms. West offered the following comments in regards to HUD and the ESP:

The loan limits will indeed be updated per county – OF COURSE SHE WAS NOT AT LIBERTY TO STATE THE NEW LOAN LIMITS FOR LOCAL SOUTHERN CALIFORNIA COUNTIES as this information is not officially available as of yet.
HUD will release the new loan limits next week so Fannie Mae can issue their lender letter!

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