Following up with guidelines about conforming loan limits in writing.

I know this is more convoluted than ever, so hopefully this helps.  I am scripting 2 below for both Nevada & Placer County

NEVADA COUNTY

There are essentially 3 buckets of loan types now: conforming, jumbo….and what I like to call “confumbo”.

CONFORMING: The true conforming is still $417,000, nationwide.

CONFUMBO: This is where it gets convoluted, so I’ll give you the short & sweet bottom line, and then a more detailed explanation.  For 2^nd home buyers, unless they are putting >40% down payment, the limit is $477,250 in Nevada County.  This is geographic specific.

Explanation:

• Confumbo limits were introduced in 2008, at that time the limit for Nevada county was $562,500, but because it was intended for primary residences, the down payment requirement for 2^nd home/investment properties was 40%.
• Jan 1^st 2009 the confumbo limit in Nevada county dropped to $477,250…the good news was that the steep down payment requirements for 2^nd home/investment properties went away.  These we are now referring to as the “2009 PERMANENT LIMITS”.
• When the stimulus package passed, it reinstated the 2008 limits ($562,500 for Nevada).  This did NOT eliminate the 2009 limits/guidelines, but temporarily brought back the 2008 limits, which we are referring to as the “2008  REINSTATED LIMITS”.
• Both programs/guidelines are currently available:  the “2009 permanent limits” & the “2008 reinstated limits”.  For 2^nd home purchases, the 2009 permanent limits can be done with as little as 10% down.

Bottom line:  The confumbo limit is 2 different numbers, and for 2^nd home owners, it depends on down payment.

JUMBO: No change.

I know this is borderline ridiculous and a lot to keep up with.  I hope this is helpful.  That’s why Teresa and I are here part of your team to help!  I’ve attached 2 documents with both limits for all counties for your reference.

*************************************************************

PLACER COUNTY

There are essentially 3 buckets of loan types now: conforming, jumbo….and what I like to call “confumbo”.

CONFORMING: The true conforming is still $417,000, nationwide.

CONFUMBO: This is where it gets convoluted, so I’ll give you the short & sweet bottom line, and then a more detailed explanation.  For 2^nd home buyers, unless they are putting >40% down payment, the limit is $474,950 in Placer County.  This is geographic specific.

Explanation:

• Confumbo limits were introduced in 2008, at that time the limit for Placer county was $580,000, but because it was intended for primary residences, the down payment requirement for 2^nd home/investment properties was 40%.
• Jan 1^st 2009 the confumbo limit in Placer county dropped to $474,950…the good news was that the steep down payment requirements for 2^nd home/investment properties went away.  These we are now referring to as the “2009 PERMANENT LIMITS”.
• When the stimulus package passed, it reinstated the 2008 limits ($580,000 for Placer).  This did NOT eliminate the 2009 limits/guidelines, but temporarily brought back the 2008 limits, which we are referring to as the “2008  REINSTATED LIMITS”.
• Both programs/guidelines are currently available:  the “2009 permanent limits” & the “2008 reinstated limits”.  For 2^nd home purchases, the 2009 permanent limits can be done with as little as 10% down.

Bottom line:  The confumbo limit is 2 different numbers, and for 2^nd home owners, it depends on down payment.

I know this is borderline ridiculous and a lot to keep up with.  I hope this is helpful.  That’s why Teresa and I are here part of your team to help!  I’ve attached 2 documents with both limits for all counties for your reference.

    Interest rates were volatile this week. After two interim date rate changes today, the 30 year conforming fixed rate ended the day at 5.0% with one point and 5.25% with no points. (Assumes primary or secondary residence, 740 plus ficos, impounds of insurance and taxes and a maximum loan to value of 80% for detached properties and 75% for attached properties (condos and PUDs).
    All is generally quiet as we face a week with no big Treasury note auctions (just a bunch of short-term bills) and few economic indicators that could shock the markets into un upward or downward move. Essentially, all we have are dissections of Fed Chairman Bernanke’s words at the regularly scheduled Humphrey-Hawkins hearings on the condition of the economy. And that is likely to be a lightweight series of mildly evasive statements, if the past has anything to teach us.�
    So we anticipate that the current gains in confidence about the overall economy–underscored by slightly higher interest rates and slightly improved economic indicators–will continue for a couple of weeks, at the least. The consensus opinion currently assumes that we’re riding into recovery. I would not trust that assumption, but I would arrange my business and marketing plans as if it were likely true.�
Business does seem to be improving, and it’s important to be one of the people whose income is improving as a direct result of the warmer stirrings in the marketplace.
 Weekly Commentary 

Thumbnail Sketch: Mixed signals, but hints of improvement dominate the news—and define investor psychology. 

It is worth remembering that the news that is good for the overall economy is quite often bad for mortgage rates and other interest rates. Good news generally makes stock prices rise, and bond prices also rise as the yields on those bonds decline. (The lower the yield, the less value the bond has.) 

What we are seeing right now is a series of largely favorable indicators. Thus, interest rates are edging higher. 

There is a Catch-22 at work here, though. If interest rates rise, then sales activity in real estate and elsewhere is likely to decline. And if sales activity declines, interest rates are then likely to fall. If the current marketplace is driving you batty, this Catch-22 may be one of the main reasons why it is. 

The other reason, of course, is that we are assured one day that the economy is moving into recovery by the market experts, and the next day we are told that a new economic indicator has thrown the prior confidence into doubt.

Thus, if interest rates are to rise in a sustainable fashion, we need the stream of positive economic indicators to continue, dominating the news and muting the force of any negative indicators. That isn’t happening, so the markets are currently very uncertain of their near-term direction. 

Still, the upward move for June housing starts is very significant. Many analysts are suggesting that the new-home wobbles are about to end, with sales firming in the next six months. 

Meanwhile, the data on new unemployment insurance claims (left) suggest a gradual strengthening of the jobs market, which is extremely important (but, alas, quite unreliable, since improvements to employment figures tend to follow the rest of the economy out of a recession). 

Industrial production fell by a slight 0.4% in June, which experts saw as very likely the last decline for the foreseeable future. 

Interest rates may rise slightly over the coming week, though they seem to want to decline as this is written. But the bigger picture suggests that the market continues to lumber toward recovery.

July 22, 2009 

KEY INDICATORS 

Gold $948.00/ounce [up]

Crude Oil (Brent) $66.74/brl [up]

U.S. Dollar to…

    Euro .7059 [down]

    Japanese Yen 93.50 [up]

6-mo Treasury Bill Yield 0.26%

10-yr Treasury Note Yield 3.48%

[6-mo down 1 bp, 10-yr up 5 bps]

11^th Dist Cost of Funds:1.832%[+]

30-yr Fixed-rate Mortgage 5.74%

15-yr Fixed-rate Mortgage 5.20%

1-yr ARM 4.71%

[HSH averages rates: 30-yr

up 21 bps,15-yr up 17 bps; 1-yr ARM up 11 bps]

Mortgage Bankers Association Mortgage Applications Index

week ending 7/10

  Overall

    514.4 (up 4.3%; up 10.9%

the week prior)

  Purchase Money Loans

    258.8 (down 9.4%; up 6.7%

            the week prior)

  Refinancing Loans

    2009.4 (up 17.7%; up 15.2%

 the week prior)

Jobless Claims 7/11

    522,000 – prior week 565,000 (as predicted) – continuing claims fell to 6.27 million

NAHB Housing Market Index July

    Rose from 15 to (still very weak) 17 month-to-month

Housing Starts June

    Up 3.6% – strongest since Nov