RTC Mortgage Blog

Loan Limits Changing Soon

May 12th, 2011 5:53 PM by Richard T. Cirelli

Loan Limits To Decrease Soon


A couple of months ago I wrote about the possibility that Congress will allow the temporary increase in Fannie Mae, Freddie Mac and FHA loans to decrease. Now, its’ almost a certainty that these limits will be lowered when the temporary limit expires September 30th.


Here’s what to expect for the high-priced markets such as Orange and Los Angeles counties:


# Units

Current Limits

Limits > 9/30/11














The Mortgage Bankers Association and other trade organizations are trying to lobby Congress to extend the current limits again. Fannie Mae, Freddie Mac and FHA were responsible for over 90% of all mortgages in the U.S. last year. The Government took over these two agencies when the mortgage and other financial markets started to collapse almost three years ago. Now, the Government wants to exit the mortgage business but can’t do so until and unless the private sector can take over.


So, while a strong argument can be made for keeping the loan limits at the present levels, there exists equal pressure for the Government to reduce the losses they incur by keeping these agencies afloat.


The Good News:


A year ago when the Government extended the loan limits, they did so because there was virtually no Jumbo financing available at all. Now, we have a number of Jumbo, Portfolio lenders that will make loans above $625,500 to $2 Million and beyond. Yes, rates are a little higher than the Government-backed loans but the gap has shrunk considerably. Many Jumbo ARM and Fixed Rate loans are still under 5%.


Good Times:



THURSDAY, MAY 19TH FROM 5:00-8:30 P.M.


$35/Advance  $40/Day of Event


The Taste for Charity is a yearly event which features a silent and live art auction from pieces of art donated by local artists and galleries in Laguna Beach.  The purpose of the event is to raise money for our local organizations. 




Mortgage rates This Week:


Rates remained fairly stable this week as a mixed bag of economic reports were released. Overall, rates are well below the levels of one or two months ago. Accordingly, many homeowners who thought they had missed the boat are now refinancing and the purchase market is stronger too. I wouldn’t hold out any longer for lower rates.

Posted in:General
Posted by Richard T. Cirelli on May 12th, 2011 5:53 PM



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