Fannie Mae and Freddie Mac Announce Requirements for Jumbo Conforming Mortgages

Fannie Mae and Freddie Mac (the government sponsored enterprises or GSEs) have each announced special requirements for the origination, underwriting, delivery, and servicing of jumbo conforming mortgages loans (loans above $417,000 up to $729,750). Both Fannie and Freddie are taking a conservative underwriting approach to the new jumbo conforming mortgages. It was announced earlier this month that the conforming loan limit for San Mateo and Santa Clara Counties will be the new maximum of $729,750.

Under Fannie's requirements, the maximum loan-to-value ratio (LTV) is 90 percent for fixed rate mortgages (FRMs) and 80 percent for adjustable rate mortgages (ARMs). The minimum FICO score for a primary residence purchase loan is 700 for loans with LTVs of more than 80 percent and 660 for LTVs of 80 percent or less.

Under Freddie's requirements, the maximum LTV is 90 percent for both FRMs and ARMs. The minimum FICO score for a primary residence purchase loan is 700 for LTVs of more than 75 percent and 660 for LTVs of 75 percent or less.

Both GSEs limit jumbo conforming mortgages to one-unit attached or detached dwellings (including condos but excluding manufactured homes). There are many other requirements that apply to these newly eligible jumbo conforming mortgages. Contact your favorite lender for more details.

Foreclosure Filings

After hearing month after month about the sub-prime loan fiasco and how that had caused the implosion of the real estate market I decided to do some investigation. The following is my interpretation of the data:

• 30% of American homes are owned "Free and Clear"
• 20% of American homes are owned by Investors.
• 50% of American homes have a Mortgage/Loan.
• In 2007 in all of America: 1.033% homes had foreclosure filings

That means we have about 1/2% foreclosures in America. Or 99.5% American homes owners are paying their Mortgages/Loans and not part of any foreclosure. Is the market really going to hadies in a hand bag? I think not.

An Ideal

...He who has the ability to see wrongs within their government have the responsibility to do whatever is possible to correct those wrongs... The Constitution of the United States