Watch"A spokesperson for Rep. Barney Frank (D-Mass.) told HousingWire Friday the Obama administration has begun work on a proposal to extend the conforming loan limits, which are set to expire in October. ... Rep. John Campbell (R-Calif.) and Rep. Gary Ackerman (D-N.Y.) introduced a bill last week that would extend the elevated loan limits for another two years."
SOAB!
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Alexandria, VA
A bill introduced by R-CA and D-NY?
Sounds like real bipartisan way, that Mr.Obama is always talking about.
I feel like, ZOMG, WTFIWTBS?
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Like a little brat picking at a scab....
just cant stop messing with it.
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More free money is coming. First off, borrow as much as you could and make banks happy. If you can't afford payment we(govt) are behind you(banks,homeowners). Nothing can teach these guys a lesson.
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I always thought the limits will be extended. What stops them from making it permanent?
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they really can't stop messing with this. They just don't learn.
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More bad policy. This should go back down to $417K in SF and NY and similar markets and lower in other markets.
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Should not be a coinidence that the bill is being introduced by congressmen from high priced housing markets. But seriously people, you knew deep down inside that an extension was coming. Did you REALLY think Congress was going to let the limits drop?
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HousingWatcher says
Orange County is neck deep in RE interest. No suprise here.
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Unlikely... Other than Barney Frank, Ackerman, and Campbell, I don't of any politician that has publicly come out in favor of the extension. Bernanke recently (last 2 weeks) has said that the private market is ready to take over funding RMBS above the new conforming limits. Obama has said that there is no entitlement to have a high-balance loan guaranteed by the taxpayers.
As recently as July 4th, in a WSJ article:
"Industry groups are making the case on Capitol Hill that reducing current limits in some of the largest markets is "the exact wrong way to go," said Jerry Howard, president of the National Association of Home Builders. But Obama administration officials say the limits should fall as scheduled, and Republican lawmakers have introduced measures to shrink the Federal Housing Administration's reach more aggressively. "
What has changed since then? Answer: nothing. Both the House and the Senate and the Executive branch are somewhat occupied, what with the governments credit cards being cut-up (debt limit). The only thing that is happening is that three representatives are talking to their base through the press.
The only people talking about extension are the above mentioned self-interested politicians, mortgage bankers, and realtors -- for obvious reasons. Voters are smart enough to understand that high-limit extensions equate to increased tax payer bailouts for Fannie Mae, Freddie Mac, and FHA. Republican voters are especially aware of this fact. Should the Republican House go the way of Frank, there will be hell to pay for Republican defectors in 2012. Not gonna happen.
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4 comments
Yes,
Let's keep prices inflated forever and keep the American Dream out of reach for those hard working Americans who want to live in good neighborhoods where employment is more attractive like DC. Why would we ever want to keep loan limits are high as they are? Most Americans can't afford these limits. Haven't we proved that through this recession? This certainly doesn't encourage someone like me to buy real estate - and I actually can afford the higher price tag. I lost a lot of money in the bubble and I won't be taken on a fool's errand again. Renting is the way to go for now! Our country is becoming a sad place. Would our founding fathers behave this way?
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From what to what?
I'd really like to know, who's actually getting a FHA loan for $750K.(or what ever the ridiculously high conforming limit is)
To prove that kind of income, you have to have a W2 for 24 consecutive months of employment. Showing you earn 1.5 mil a year. Folks earning that kind of bread aren't exactly on a Biweekly paycheck, nor do they last that long at companies.
This whole conforming limit fiasco, is only a Dog and Pony show, to appear this Administration, well "Washington as a Whole" gives a rats ass about how the actual citizenry is faring.
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Los Angeles, CA
Makes sense, predicted this as well. Not sure why not permanent. $400K is a luxury house in Iowa, but in SF, LA, NYC this is entry to mid level.
How about some tax rate adjustments, too? Obama talks about $250K being rich. In Manhattan? (Aside from the fact that he's confusing income with wealth...) That's barely getting by for a family of 4.
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Ross, CA
I have a hard time believing this congress would extend the conforming limits.
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Tenouncetrout,
You don't need to make $1.5 million a year for a 750k mortgage. You need to make about $200k
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Driong,
Theoretically, perhaps. As a practical matter, that is hilarious! Are you a Realtor®?
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DC real estate for the rich only says
Our founding fathers would overthrow our disgusting, selfish, bureaucratic, anemic, and abusive government.
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Many of our Founding Fathers also kept slaves. Much of the institutions they set up, were to protect their "right" to that asset.
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Ross, CA
Sybrib says
If no one is getting the jumbo fha loans why is the NAR throwing such a sissy fit about the limits being reduced?
I know 2 people in my neighborhood who got 729k loans in the past 12 months. They ain't making 1.5mil.
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rowemore,
Like you I know lotsa such folks. I also know lotsa such folks who on the surface appear affluent, but are a nervous wreck.
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rowemoore says
Most likely living paycheck to paycheck. Just 1 disaster away from default or may be they are 2 of those rich Chinese.
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JG1 says
Even so, helping people who already make in the top 20th percentile doesn't make a whole lot of sense. If anything we should have less government intervention right now in the mortgage market, not more. That would bring housing prices closer to reality in expensive markets.
rowemoore says
I don't. Follow the money and the lobbyists.
rowemoore says
Because they whine about anything that could possibly reduce their unearned commissions.
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corntrollio says
http://en.wikipedia.org/wiki/National_Association_of_Realtors
The NAR wields substantial power as a lobbying organization on behalf of agents and brokers; in 2005, NAR had the largest Political Action Committee in the United States. According to the Center for Responsive Politics, the association is the United States' third-largest donor to political campaigns, having given since 1990 more than US$30 million. Of this sum, an average of 47% has gone to Democrats and 53% to Republicans. Key political issues for the group revolve around federal regulation of the financial services industry.
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Los Angeles, CA
JG1 says
Makes sense, predicted this as well. Not sure why not permanent. $400K is a luxury house in Iowa, but in SF, LA, NYC this is entry to mid level.
Even so, helping people who already make in the top 20th percentile doesn't make a whole lot of sense. If anything we should have less government intervention right now in the mortgage market, not more. That would bring housing prices closer to reality in expensive markets.
But not top 20th income in these markets, only on a nationwide basis, which is my whole point. These markets are more costly to live in, dollars don't stretch as far, or buy as much house, salaries are higher to compensate...
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JG1 says
Depends on your measure. The median income in the city of SF, after all, was around $70K as of 2009 (http://www.city-data.com/city/San-Francisco-California.html). It's also, of course, hard to discuss California without discussing Prop 13, which artificially lowers housing inventory and artificially raises prices.
The people buying $400K houses in these markets are still fairly privileged, even if they feel comparably poor. I personally think the limit should be far lower than $417K in most markets, if not all, if the goal is to help with affordable housing.
Add the fact that all these limits do is lower interest costs on the federal dime and raise the price of housing to compensate for the lower payments. That might be great for used house salesmen and banksters who get price-based fees/commissions, but it's not good for anyone else. It would be far better for people to pay market rate interest, have government guarantees only in the most extreme circumstances, and enjoy the resulting drop in prices, the more prudent lending practices, and the lower likelihood of future bubbles. Propped up housing prices don't do most of us any good.