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SF Bay Area Conforming Limit Not Actually Raised


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2008 Dec 10, 2:22am   23,290 views  179 comments

by Patrick   ➕follow (59)   💰tip   ignore  

limit

A friend of mine who just refinanced in SF Bay Area tells me that the single-family conforming limit (the maximum size mortgage that can be sold to Fannie or Freddie) was not actually raised to $800,000 or whatever they were threatening to do. The conforming loan limit for the SF Bay Area is still $417,000.

What's going on? I'm grateful that there is a limit to the insanity, but I somehow I missed hearing about this in the news.

I thought we were all even more screwed by Congress' agreeing to put taxpayers on the hook for really huge mortgages. Why didn't they do it? It's so unlike them!

Patrick

#housing

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45   justme   2008 Dec 12, 1:18am  

Uh, I did mean of course. "put the horse, before the cart".

Headset, you must have gotten a good laugh out of that one. :-)

46   justme   2008 Dec 12, 2:46am  

I have a question for those in the search biz:

What does it really mean for Microsoft to "buy Yahoo's search business", as is being pushed by some shareholders?

I have to say, I cannot quite figure it out. Does it mean Yahoo does not have a search box on their home page anymore? Or that the search box will lead you to a Microsoft-operated server? Or that Microsoft will handle the business of selling the search advertising? Or what?

I'm just quite sure it is not quite what it sounds like. And that usually there is some ugly detail that is being left out.

Someone please enlighten me!

47   justme   2008 Dec 12, 2:47am  

...usually MEANS...

48   🎂 DennisN   2008 Dec 12, 3:44am  

If Adam was man enough to kill the snake…

Let the hero born of woman crush the serpent with his heel!

49   Peter P   2008 Dec 12, 4:25am  

Bush is a LIBERAL. I cannot image a true Republican being capable of calling for such a bailout.

50   justme   2008 Dec 12, 4:36am  

That's a nice strategy.

If a Republican President does something wrong, one can just re-define him as being Liberal and keep going. No blame for the party as a whole for choosing him as their candidate, or anything like that.

Should have thought of that earlier....wait...uh.... why didn't the war make him a Liberal, too?

51   Peter P   2008 Dec 12, 5:03am  

why didn’t the war make him a Liberal, too?

The president who got us into the last world war was also a liberal.

Besides, who started the Vietnam War again? Liberal or conservative?

Sorry for being late. Now I really despise GWB.

52   Peter P   2008 Dec 12, 5:13am  

I am extremely disappointed with Thad McCotter. He made a beautiful speech against the Wall Street bailout but now he is on the side of the automakers.

I would rather agree to helping the financial system instead of the defunct auto industry.

Of course, given a choice, I would never bailout anything.

53   Peter P   2008 Dec 12, 5:14am  

Of course, Ron Paul is always Ron Paul. He is the Gold Standard of political integrity.

54   justme   2008 Dec 12, 8:00am  

TOB,

There must be a little more to it than transferring queries and user information entered at Yahoo website to Microsoft?

Btw, I have no illusions about what google is up to.

55   justme   2008 Dec 12, 8:41am  

Good one.

57   PermaRenter   2008 Dec 12, 12:17pm  

>> As predicted, good Republicans are mounting a stand against the automaker bailout. Taxpayers should not have to subsidize artificially high labor costs.

I fully agree ...

By the way, I voted independent this time .....

59   Duke   2008 Dec 12, 11:42pm  

Thanks frank! Great article!

The issue is what we do about a form on coerced savings - 401ks. If your employer matches, then any investment not doomed to loss half of its value is still advantageous. Too bad cash is not an option in 401ks (and money markets are NOT cash - I think many/most will break the buck to 75% with the pending business failures).
If your employer halts matching the decision is easy. Stop contributing!

This article is as well written and accurate as any written in the last 2 years.

60   frank649   2008 Dec 12, 11:43pm  

I was just tallying up the annual performance of Peter Schiff's recommended investment products over at Euro Pacific Capital:

RICI -50.00%
GLD -20.00%
HTE -65.00%
PWE -70.00%
PVX -65.00%
ERF -60.00%
MEAFX -20.00%
MERKX -12.00%

Why anyone still listens to this clown is beyond me.

61   frank649   2008 Dec 12, 11:50pm  

GLD is actually down 20% from it's high this year. This is not a YTD return.

62   frank649   2008 Dec 12, 11:58pm  

Yes, best to invest in Treasury MMFs if available.

One strategy might be to take a loan out against your 401k. Not sure what the rules are regarding this. It's something I plan to look into soon.

63   justme   2008 Dec 13, 12:23am  

Bernhard Madoff: I'm wondering how much capital he had under management. All the news stories say 50B losses, but out of how much capital? He cannot possibly have lost or spent it all...

64   Duke   2008 Dec 13, 1:09am  

Schiff is correct in his thesis - he is just very wrong (so far) about what to do in the world he predicts. His gld may well pay off in the long run. His foreign investment - never. It is very clear there is no de-coupling.

As for buying short term treasuries and holding them to maturity. Yes. But, most do not have that as an option to their 401k. AND you would have to pick the time at which you stop that. Which I guess is pretty easy. When the DOW hits 4,500 it is a good time to buy. Bonds seem good, but who on earth can do their due diligence on which companies will survive the massive and underway contraction?

65   frank649   2008 Dec 13, 1:24am  

"His gld may well pay off in the long run."

Eventually, but he's been calling this for years. He has been grossly wrong in his prediction of inflation vs. deflation, among other things like decoupling as you mention. Based on his recent performance and predictions of the near future, I wouldn't bet a dime with him.

Not treasuries outright but money market funds consisting of only UST.

You can take out a loan against your 401k and pay yourself the interest (without any penalties). This can move a significant amount of your savings out of harms way while the market searches for a bottom (at least 50% more downward movement within the next 2 years, imo).

66   PermaRenter   2008 Dec 13, 2:46am  

Census shows Cupertino, Milpitas have Asian-majority populations
By Mike Swift
Mercury News
Posted: 12/09/2008 04:46:08 PM PST

Cupertino has joined Milpitas as the second city in the South Bay where a majority of residents is now Asian, a rare cultural phenomenon that sets the two communities apart — even in one of the most diverse counties in the country.

Its Chinese population was already well established, but Cupertino's rapidly growing Indian community has pushed its overall Asian population to 56 percent of residents, according new census data released today — making it one of just 18 cities of 20,000 or more people in the country where Asians are more than half of all residents. All of those cities are in California or Hawaii.

Asians already were a narrow majority in Milpitas in 2000, but with a growing population of Chinese, Indians, Filipinos and Vietnamese, Asians now make up nearly 60 percent of Milpitas' population.

What is happening this decade in cities like Milpitas and Cupertino, demographers say, is partly the culmination of years of immigration, as growing immigrant communities act as a powerful magnet, drawing relatives and others lured by cultural comforts and good schools. The economic downturn after 2007 may well put the brakes on that growth, however.

.......
.......

For Patricia Rod, a 17-year Cupertino resident who is white, most of the changes that have come from having "lovely neighbors" who are Chinese, Indian and Vietnamese have been positive — including her property values.

Rod, a cardiac sonographer, also feels her kids are "so much more worldly" because of Cupertino's diversity. But while two of her daughters flourished in the increasingly competitive schools, Rod had to enroll another of her children in private school.

67   justme   2008 Dec 13, 5:29am  

TOB,

Michael Moore is f*cking brilliant.

68   Duke   2008 Dec 13, 6:21am  

I am of the comlete opposite opnion. I think Moore is the biggest buffoon ever. I scannd the article and I would most lilely agree with his position, but from him it is bound to be cartoonish, overblown, distorted. . .

Bleh

69   frank649   2008 Dec 13, 10:12am  

Hope no one is still buying the commodity bull market hype.

http://www.cnbc.com/id/15840232?video=960474937&play=1

70   Paul189   2008 Dec 14, 12:50am  

@ Frank,

That oil call of 10 - 30 bucks a barrel reminds me of the 200 - 300 calls when we were at the top. So, I would say the bottom is in. Also, to see $10 that means a continued bull run for the USD and I can't buy into that.

71   Jimbo   2008 Dec 14, 1:21am  

Yet I’m quite certain this guy was told by Wells Fargo that the conforming limit was not raised above $417K.

There are banks that are willing to lend at the higher conforming limits. Patelco Credit Union is one of them.

72   slumlord   2008 Dec 14, 1:34am  

Oil is a tough one. I know that there is a magic number where it no longer is profitable to pull oil out of the ground. As oil gets cheaper fewer will be in the business. I believe its around 20-30 dollars a barrel in some places so I would say that would be an absolute bottom where there was no profit.

73   Zephyr   2008 Dec 14, 2:58am  

The price of oil can easily go below $10 per barrel before production costs would interfere.

Finding oil and establishing the well is the big cost these days. Once the well is operational the cost of pulling the oil from the ground is only $4 to $8 per barrel. The Saudis can make money at $6 per barrel.

The recent oil price bubble stimulated the development of new wells when people thought oil would stay above $100. Next year many new wells will come on line - and they will pump it.

In addition, the Saudis and many other sovereign producers (ie Venezuela) need the cash for their government operations. As the oil price declines they will need to sell MORE oil.

74   Zephyr   2008 Dec 14, 3:08am  

Demand is fading and supply is growing. A massive surplus is developing. The price must fall.

Of course, at $10 or $20 per barrel nobody would invest in new supply. Thus setting the stage for the next price runup, after demand recovers sufficiently to exceed the new level of the supply capacity. That will take many years.

75   Zephyr   2008 Dec 14, 3:12am  

I doubt that we will ever see $10 or even $20 per barrel prices in nominal terms again. However, adjusted for inflation I think a low of around $20 is very likely.

76   Jimbo   2008 Dec 14, 6:11am  

That story is pretty funny Permarenter. Parents in Cupertino are putting their kids in private school because the public schools are too good!

77   kewp   2008 Dec 14, 6:38am  

I was just tallying up the annual performance of Peter Schiff’s recommended investment products over at Euro Pacific Capital:

Why anyone still listens to this clown is beyond me.

I still like the guy.

If anything, he proves my rule that when two people are arguing, its most likely that they both are wrong.

78   PermaRenter   2008 Dec 14, 8:32am  

>> That story is pretty funny Permarenter.

Yeah ... shows that Crapertino is a Chindian mecca ...

79   thenuttyneutron   2008 Dec 14, 9:07am  

I just watched 60 minutes and saw an interesting story about the asset bubble that is now correcting itself. One of the guests on the show is saying that we are only about 1/3 through the correction. We still have CC, commercial RE, Alt-A, Auto, and Option ARMS to get through.

80   slumlord   2008 Dec 14, 9:11am  

Zephyr,
Yeah, I have heard the $6 a barrel number before. I doubt it would ever go that low. I have a family member in oil and he says some people say $8 a barrel others say around $30. So it really depends on who and where you are talking about. We can take somewhere in between to be a absolute low where it no longer would be profitable.

81   Zephyr   2008 Dec 14, 10:17am  

Oil prices bottomed at about $10 about 10 years ago. On an inflation-adjusted basis that would be about $15 today. I could see that happening again if the world economy weakens enough.

At $15 most wells would keep pumping. They would still be able to cover their current marginal costs and have good positive cash flow.

Of course, the total cost of finding and lifting the oil is much higher. Onshore costs have recently been in the $20 to $30 per barrel range, and offshore costs are multiples of that. So in the long run, I think pricing below $30 is not sustainable, and prices above $60 are unavoidable.

If I were to pick a number for reversion to the mean it would be $60 per barrel. However, since we are correcting from an oil price bubble with a slowing global economy, I would expect a substantial overshoot to the downside in the next few years.

82   frank649   2008 Dec 14, 10:23am  

Also, to see $10 that means a continued bull run for the USD and I can’t buy into that.

OPEC said to be planning more production cuts and Saudis stated target of $75.

Seems there continues to be worry by those at the spigot that oil can keep dropping.

83   justme   2008 Dec 14, 11:41am  

Neutron,

Ha ha, you guys in the Eastern time zone often get a jump on the TV news. I'm watching 60 Minutes right now and was about to say what you wrote 2.5 hours ago.

The significance of the TV program: The words Alt-A and option-ARM will now be household words.

There was also a great interview with Barney Frank, where he punched back at those trying to blame him.

84   justme   2008 Dec 14, 11:45am  

Duke,

Towards the end of the article, Michael Moore was not pulling any punches, I'll concede that, but why should he?

As far as the content goes, don't you think he was spot on in his analysis of the facts, and of the Republican attitude towards an automaker bailout?

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