FHFA Announces New Loan Limits

“New” 2009 conforming loan limit unchanged from $417,000; high-cost areas now max out at $625,500

LOS ANGELES (Nov. 7) –The Federal Housing Finance Agency (FHFA) today announced that the “new” conforming loan limit for 2009 will remain at $417,000 for most areas in the U.S., unchanged since 2006. Loan limits for high-cost areas, including California, are capped at $625,500, down from the previous $729,750 limit. Loan limits for many areas of the state do not reach this lower threshold and are dramatically reduced from 2008.

"Although price declines mean that the total number of homes eligible for conforming financing has increased, we’re disappointed that the $729,750 limit stipulated in the Economic Stimulus Act of 2008 signed in February was not made permanent,” said C.A.R. President William E. Brown. “The reduction in the loan limit to $625,500 will negatively impact both the interest rates and the availability of funds for jumbo mortgages.

“We hope Congress will make the $729,750 limit permanent before the end of the year as one of the provisions in an economic stimulus package,” he said.

The conforming loan limit determines the maximum size of a mortgage that Government Sponsored Enterprises (GSEs) Fannie Mae and Freddie Mac can buy or guarantee. Non-conforming or jumbo loans typically carry a higher mortgage interest rate than a conforming loan, increasing the monthly payment and negatively impacting affordability for households in California.

In California, the new conforming loan limits for metropolitan areas range from $474,950 in the Sacramento-Arden-Arcade-Roseville metropolitan area, covering El Dorado, Placer, Sacramento and Yolo counties; to $625,500 in the Los Angeles-Long Beach-Santa Ana metropolitan area.

Leading the way...® in California real estate for more than 100 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States, with more than 175,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.

The 5th Annual Turkey Ride - A TEAM FONG Charity Event

As many of you know, Lawrence Fong, LATriClub Membership Director and all-around great guy has been severely injured in a fall. This year we have decided to make TEAM FONG (Lawrence and his lovely wife, Beth) our primary beneficiary for our annual Turkey Ride. The logistics of to whom and how one can donate are currently being worked out and will be posted on this site soon.

Donations are not required to attend the ride, however, any and all help is greatly appreciated. In addition, should you also have items you'd like to donate to the East Valley Animal Shelter, we will be collecting those as well.

For more information on the Lawrence Fong's progress, please visit: http://www.caringbridge.org/visit/lawrencefong

Please see ride details below:

It's hard to believe that it's been 5 whole years since we started, but it's true! Here are the details for the ride:

WHAT: CHARITY RIDE- To raise donations for TEAM FONG and have fun!

WHEN: THURSDAY, November 27, 2008. Thanksgiving!

TIME: 7:45am - early yes, but we're sure everyone has something to do, so be on time please.

LOCATION: Hugo's Restaurant parking lot, 12851 Riverside Drive, Studio City, CA 91607 (www.hugosrestaurant.com). You can also pull up a map on the restaurant website.

RIDE: We'll be heading east down Riverside and will pass through Toluca Lake, Burbank, etc. and eventually end up in Griffith Park. We'll do some loops through the park and then head back to Hugo's. Ride time will be approx. 2 hours, give or take. We will keep the pace easy (this is a charity ride!) and nobody will get dropped.

WHAT YOU'LL NEED: A bike, a spare tube, air or pump, gel or bar and/or drink, helmet, cycling shoes, warm clothes for early morning weather, the skills and ability to ride for 2 hours and in a group, a friendly dazzling personality.

QUESTIONS OR PROBLEMS: post here/email on myspace (www.myspace.com/turkeyride).

RSVP: Let us know by posting a comment. If you're an LaTri Club member, please also RSVP on the latriclub.com race calendar page so we know who/how many to expect and so we don't leave anyone behind.

See you Thursday, November 27!

Residential Finance News

Residential Finance News

Existing Home Sales See First Year-over-Year Increase in Five Years

MBA (10/27/2008) Vetz, Orawin

Economic data were sparse last week, with rare good news emerging from the housing markets. After hovering in a narrow range of 4.8 million to 5.0 million units over the past 10 months, total existing home sales jumped in September by 5.5% - the biggest increase in more than five years to 5.18 million Units.

Sales of single-family homes during the first nine months of this year were down by 14.8% from those during the same period last year. The year-to-date decline has been worse for condos at 21.8% lower than those last year.

Existing home sales in the West rose 34.4% from last year, marking the third consecutive month of year-over-year increases. The west was the only region where sales have increased from a year ago during this housing recession. While all other regions continued to show declines in home sales from a year ago, the drops have been the smallest in more than a year.

About 35 to 40 % of sales were foreclosure or short sales, according to the National Association of Realtors. Sales increased by 1.4% from September 2007 - the start of the financial turmoil - marking the first year-over-year increase since November 2005 thanks to a 34% surge in sales in the West.

While the renewed credit crisis that began in mid-September following the bankruptcy of Lehman Brothers will likely impact sales in the coming months, distressed sales, which significantly boost affordability, should prevent sales from dropping off sharply and allow sales to stabilize near the 5.0 million mark for the fourth quarter.

A Flight to quality returned last week, as stock markets around the world plunged, making Treasury's a safer alternative. Treasury prices jumped as demand increased, pushing yields lower across all maturities.

Federal Reserve policymakers this week announced a 50 basis points cut in the federal funds rate on 10/31. The rate now sits at 1%, a five-year low. The federal funds rate is the interest rate on money loaned between banks. Since banks must keep a certain percentage of their money in reserve, they must borrow money overnight from one another to make sure they have enough set aside. By lowering the funds rate, the Fed makes it cheaper for banks to borrow, which frees up more money that can be loaned to consumers.

The Conference Board index of leading indicators - a gauge of future economic activity - rose by 0.3% in September the first increase since April. This indicator is designed to forecast turning points in the business cycle based on 10 economic components. Six of the 10 components increased during the month. These included an increase in money supply and improvement in consumer expectations. Four negative contributors included a sharp decline in stock prices and residential permits and higher unemployment claims.

This Week:

• Monday - September new home sales
• Tuesday - The Conference Board's Survey of Consumer Confidence for October
• Wednesday - September durable goods orders and the conclusion of the two-day Federal Market Committee Meeting
• Thursday - the advance estimate for gross domestic product for the third quarter
• Friday - September personal income and personal consumption expenditures, the final estimate of the University of Michigan's Survey of Consumer Sentiment, and the third quarter Employment Cost Index.