Housing markets about to be squeezed


By tovarichpeter   Follow   Fri, 13 Sep 2013, 10:32am   461 views   5 comments
In South San Francisco CA 94080   Watch (0)   Share   Quote   Permalink   Like   Dislike  

http://finance.yahoo.com/news/housing-markets-squeezed-120214467.html

A plan to lower the cap on federally backed mortgages may hit home buyers particularly hard in several pockets of the country, new data shows. The Federal Housing Finance Agency plans to reduce the maximum size of mortgages backed by Fannie Mae and Freddie Mac this January. The current limits are $417,000 in most parts of the country and up to $625,500 in more expensive markets. The agency hasn't announced how much it will lower loan caps, but data compiled for MarketWatch by Lender Processing Services, a mortgage-data tracking firm, shows that a decline of just $25,000 from the current...

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  1. smaulgld


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    1   3:00pm Fri 13 Sep 2013   Share   Quote   Permalink   Like   Dislike   Protected  

    Shouldnt impact all cash buyers

  2. iwog


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    2   3:04pm Fri 13 Sep 2013   Share   Quote   Permalink   Like   Dislike   Protected  

    Shouldn't impact anyone. Non-conforming loans are already the same rate or sometimes even cheaper than conforming loans.

    It might have a small effect on qualification standards however I'm betting banks will simply copy what Freddie and Fannie already have on the books.

  3. smaulgld


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    3   3:13pm Fri 13 Sep 2013   Share   Quote   Permalink   Like   Dislike   Protected  

    iwog says

    Shouldn't impact anyone. Non-conforming loans are already the same rate or sometimes even cheaper than conforming loans

    right so what is the purpose?

  4. PockyClipsNow


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    4   3:15pm Fri 13 Sep 2013   Share   Quote   Permalink   Like   Dislike  

    This will never happen. NAR wont allow it.

  5. iwog


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    5   3:41pm Fri 13 Sep 2013   Share   Quote   Permalink   Like   Dislike   Protected  

    smaulgld says

    right so what is the purpose?

    The purpose used to be to expand the amount of money available for lending. Freddie and Fannie would sell bonds and those bonds would be used to purchase or guarantee private mortgages.

    The world is much different now.

    1. Private mortgage bonds are now a liquid market separate from Freddie and Fannie.
    2. There's an ocean of cash just begging for returns at ridiculously low rates.
    3. The federal reserve is donating money to mortgage bonds.

    As a result what used to be a private money premium has now shrunk to zero.

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