From Realtor Magazine Online, Daily Real Estate News May 22, 2008
The bi-partisan housing deal that passed the U.S. Senate Banking Committee on Tuesday would limit Fannie Mae and Freddie Mac to buying loans that are less than $550,000.
The current limit is $729,750 in high-cost areas of the country. It was raised earlier this year from $417,000. That higher limit expires at the end of 2008.
Mortgage bankers are watching the negotiations closely. Steve Habetz, president of Threshold Mortgage in Westport, Conn., says higher limits are needed for expensive parts of the country, such as the New York suburbs. While a permanent extension to more than $700,000 would be preferable, he says, "I'll take what they'll give me."
The current higher limits appear to be stabilizing the market. As of last week, rates on Fannie and Freddie-backed jumbo loans were averaging 6.5 percent, a premium of 0.4 percentage points over the rate for conforming loans, according to HSH Associates. That premium had been about 0.7 percentage points a month earlier.
Source: The Associated Press, Alan Zibel (05/21/2008)
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