Pleasanton Weekly

Real Estate - January 3, 2014

Fannie Mae to keep conforming mortgage loans at $625,000

Drops plan to lower cap that Realtors said would hurt market growth

by Jeb Bing

The California Association of Realtors praised the Federal Housing Finance Agency this week for deciding to keep the 2014 maximum conforming loan limits for mortgages acquired by Fannie Mae and Freddie Mac at $625,500 in country's high-cost housing such as the Tri-Valley and much of the greater Bay Area.

The cap affects single family homes with the cap remaining at $417,000 in other parts of the country.

"C.A.R. applauds the FHFA for keeping with the law and retaining the existing Fannie Mae and Freddie Mac conforming loan limits," said CAR President Kevin Brown.

"The FHFA recognizes that home prices have rebounded in California, especially in the high-cost areas, where lowering the loan limits would have reversed the housing recovery," Brown explained. "Retaining the higher loan limits is critical to providing liquidity in today's housing market and is essential to a full housing recovery."

Earlier this year, the FHFA announced its intention of lowering the loan limits. Since then, CAR and the National Association of Realtors aggressively fought to prevent a reduction in the loan limits.

Both organizations have long advocated for making higher conforming loan limits permanent. As a result of those efforts, Congress has now made permanent the maximum conforming loan limits at $625,500.

Comments

Posted by Martin, a resident of Another Pleasanton neighborhood
on Jul 17, 2014 at 4:27 am

Mortgage prices are still too high and it is really difficult to pay it off. The only way to pay off the mortgage earlier is to find a higher paying job or to work 24 hours a day. Real estate is very expensive and this is the deal for investors. It is better to relax, enjoy this life and to use Web Link


Posted by I pay my debts, a resident of Downtown
on Jul 17, 2014 at 7:31 am

I don't care so much about the upper limit but the required down payment should be 30% or more and the penalties for not defaulting on the loan should be far greater. So many greedy realtors used greedy lenders to put stupid and greedy buyers into homes that they could never afford. Then the idiots walked away from the loans with virtually no penalty -- many of them going from a foreclosed home into the purchase of another home right away. No lender should EVER loan those deadbeats money again, for the rest of their lives. No home loan, no equity loan, no car loan, period. You default on any loan, you are toxic for life. As it is, those of us who actually pay our debts are funding life for these deadbeats who walk from them.


Posted by SimpleMinds, a resident of Downtown
on Jul 17, 2014 at 12:42 pm

@Martin with interest rates so low I'm not sure from a cash-flow standpoint why anyone would want to accelerate the pay-off of their mortgage. Not only are interest rates low but you also receive a tax deduction for the interest paid.


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