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New FHA and Fannie Mae - Freddie Mac conforming loan limits
have been released by the U.S. Department of Housing and Urban Development.
The new loan limits for FHA and Fannie Mae and Freddie Mac are
calculated on a county by county basis at 125 percent of the HUD published
median prices for that county, with a floor value of $271,050 and $417,000,
respectively, not to exceed $729,750.
For Harris and Montgomery Counties in Texas the numbers are:
HUD Median Price: $199,000
Old FHA Limit $200,160
New FHA Limit $271,050 (the new floor value)
GSE Limit $417,000 (unchanged at new floor value)
HUD was mandated as part of the Economic Stimulus Act to publish
new loan limits within 30 days of the bill's signing by President Bush on
February 13th.
The National Association of Realtors expects the national impact of these loan
limit increases on the housing market to be significant because of the infusion
of capital into the mortgage market. NAR believes this should result in lower interest rates
across the board. NAR also believes there will be a direct impact on high-cost areas
that previously required borrowers to take out costlier jumbo mortgages.
NAR research indicates that increasing FHA loan limits will help an additional
138,000 Americans achieve home ownership and will allow nearly 200,000
homeowners to refinance and potentially keep their home.
In addition, NAR believes that increasing the loan limits for Fannie Mae
and Freddie Mac (which
DID NOT happen for Harris and Montgomery counties), will bolster
the national housing finance market, which continues to be severely stressed, by
providing an immediate infusion of much needed liquidity to the nation’s
mortgage market.
An economic impact study conducted by NAR in January 2008 estimated that
increasing the GSEs’ conforming loan limits
(which DID NOT happen
for Harris and Montgomery counties) would result in as many as
500,000 refinanced loans and could help reduce foreclosures by as much as
210,000. In addition, over 300,000 additional home sales could be generated,
housing inventory would be reduced and home prices would be strengthened by two
to three percentage points.
To see the data for the rest of the country follow this link:
National Conforming Loan Data by State/County
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In an effort to make it easier for lenders and borrowers to understand consumer
credit scores, the three biggest U.S. credit-reporting firms — Equifax Inc.,
Experian, and TransUnion — have banded together to standardize the method of
calculation.
The three firms have long used their own formulas to calculate credit scores,
with varying grades sometimes resulting.
The joint system, VantageScore, bring consistency to the process and will make
it easier for consumer to understand their score. VantageScore will offer
ratings ranging from 501 to 990, with those over 900 earning an "A" rating.
Though the credit-reporting firms will use the same exact formula to calculate
the scores, they will continue to collect credit data individually.
VantageScore reportedly will make it easier for consumers with limited credit
histories to obtain financing. Just like the traditional FICO credit-scoring
system by Fair Isaac Corp., borrowers will score higher by making timely bill
payments, keeping balances low, and showing a history of paying different types
of debt.
Link to additional information
Source: Los Angeles Times, Kathy M. Kristof
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