News On Conforming Limit Increase: $625,000?

by Alex Stenback on January 23, 2008

We’ll post this without comment other than to say, anything can happen in Washington (so don’t place any big bets on this info), and this is from a very reliable source:

"Sources in the House, the Senate, and the White House are all indicating today that a tentative consensus has been reached that the economic stimulus bill that Congress will send to the President will include much of the FHA Reform Legislation including raising the FHA loan limit max to match the FHA conforming limit AND a one year raise of the conforming limit to $625,000 with the possibility of an additional one year extension at expiration. All sources also indicate Congress will deliver the bill to the President before their break in mid-February and that it should be signed by the end of February. Obviously this is not "done" but all of the sources I am using are very close to the action. This would mean that we could see at least the loan limit portions of the legislation we are hoping for within the next 6 weeks."

[Update: Lively discussion on this topic over at Calculated Risk, courtesy of Tanta, who was kind enough to link up this post ]


{ 1 comment… read it below or add one }

Nate January 24, 2008 at 4:00 pm

Nice scoop if this turns out to be accurate.

I did some thinking on this when calculated risk ran a break down explaining how jumbo mortgages were very focused in specific high cost markets ( ~50% in California, ~20% in New York, etc..). Republicans were pushing for this already, and because a lot of these jumbo markets seemed to be focused in democratic tending areas it seemed likely to make it through the political process.

Calculated risk also showed that the jumbo mortgage market is much more heavily focused on “innovative” mortgage products. Add to that they are focused in areas that are leading the pack in negative appreciation. So personally I tend to see this as a way to bail out the lending institutions in a way that the regular public won’t recognize.

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