New Loan Limit Would Hurt Home Sales

Unless Congress takes action, the current loan limits will expire on Sept. 30 and the cost of a mortgage could rise significantly, especially in high-cost areas such as California.

More than 30,000 California families could face higher down payments, higher mortgage rates, and stricter loan qualification requirements if conforming loan limits on mortgages backed by the Federal Housing Administration (FHA), Fannie Mae, and Freddie Mac are reduced beginning October 1, 2011, according to analysis by the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.).

The conforming loan limit determines the maximum size of a mortgage that FHA, Fannie Mae, and Freddie Mac government-sponsored enterprises (GSEs) can buy or guarantee.

Non-conforming or jumbo loans typically carry a higher mortgage interest rate than a conforming loan and require a higher down payment, increasing the monthly payment and negatively impacting housing affordability for California home buyers.

C.A.R. and the NATIONAL ASSOCIATION OF REALTORS® (NAR) have long advocated making permanent higher conforming loan limits. As a result of C.A.R.’s and NAR’s efforts, in 2008, Congress temporarily raised the conforming loan limits from $417,000 to $729,750 and has extended them annually through fiscal year 2011.

Regionally,
Marin County would be impacted the most, with more than 12 percent of home sales rendered ineligible under the lower GSE loan limit, followed by Contra Costa (11.5%), San Mateo (10.7%), San Francisco (9.9%), Monterey (8.8%), San Diego (8.2%), Sonoma (7.9%), and Santa Clara (7.8%) counties.

Under the lower FHA loan limit, San Francisco County would be impacted the most, with
more than 14 percent of home sales rendered ineligible, followed by Santa Cruz (13.9%), Orange County (13.3%), Marin (13.2%), San Mateo and Ventura (both at 12.7%), Santa Clara (12.2%), San Diego (11.9%), Alameda (11.8%), Riverside (11.5%), and Contra Costa (11%) counties.

Read the full story http://mortgage.ocregister.com/2011/06/23/realtors-new-loan-limit-would-hurt-homesales/45927/

And Speaking of Scams ...

...an old scam is making a come back.

Most of us homeowners have had our mortgage servicer changed. We get the letter telling us where to send our house payments from now on. Well, con artists have found a way to hijack a payment or two!

First comes the letter from a fictitious company that says it has begun servicing your loan. You get your new "account number," along with coupons for your mortgage payments. Unfortunately, by the time you figure out your loan has not really changed servicers, you are already out a payment or two!

So how do you know the difference between a real transfer of mortgage servicers and a con?

• Under the law, your current servicer is required to send a "goodbye" letter notifying you that your payments should be sent to a new company as of a certain date.
• A week or two later, the law says you should receive a second letter, which, by law, should include a welcome missive from the new servicer with the details of the mortgage payment, which includes a breakdown among principal, interest, and escrow. This package is also likely to include a few payment coupons, if not a brand-new coupon book, and self-addressed printed envelopes for borrowers to make payments.
• Both the goodbye and welcome letter should include the original mortgage loan number. if either letter does not, or if the information included in one doesn't match what's in the other, you should call your original servicer to inquire.
• If you receive only one letter, be extra cautious. Even if everything appears to be standard procedure, you are still advised to call the first company's toll-free number just to be sure!