From HousingWire:
GSE conforming loan limits could adjust again
Policymakers are contemplating a reduction in the maximum size of home loans that Fannie Mae and Freddie Mac are allowed to acquire, hoping this change will reduce the government’s dominant footprint in the mortgage market.
However, many industry experts are concerned such a move to adjust conforming loan limits will limit the pool of potential homebuyers, derailing the current housing recovery. Rumors really took off when the Wall Street Journal noted that plans are underway to adjust the limits.
The National Association of Realtors (NAR) said it’s prepared to work with Congress on mortgage finance reforms that maintain consumer access to affordable mortgage products for qualified borrowers. But it’s too soon to change the conforming loan limits, the association’s leader said.
“It would be counterproductive to make changes to the loan limits before capital is fully engaged,” explained NAR president Gary Thomas.
Currently, both enterprises have loan balances as high as $417,000 in the majority of the country and up to $625,000 in expensive housing markets such as San Francisco, Boston and Washington D.C.
Mortgage Bankers Association president and CEO David Stevens believes the loan limits will adjust downward to $400,000 and $600,000, respectively.
While it may seem marginal, Stevens says without a comfortable return of private capital, only the wealthiest borrowers with high downpayments and solid credit scores will be able to purchase a mortgage.
“While the change will be small, it will be assumed that borrowers in the middle class won’t have an option for a home loan unless FHA takes over the loans that are no longer eligible,” the MBA CEO and president argued.
Impact to the 10% down buyer:
@ $417k – Max purchase is $463,333
@ $400k – Max purchase is $444,444($18,889 loss in purchasing power)
Impact to the 20% down buyer:
@ $417k – Max purchase is $521,250
@ $400k – Max purchase is $500,000 ($19,000 loss in purchasing power)
Impact to the 30% down buyer:
@ $417k – Max purchase is $595,714
@ $400k – Max purchase is $571,419 ($24,295 loss in purchasing power)
Looks like the conforming loan limit reduction would hurt large DP buyers as well as move-up buyers more than the low DP buyers.
Follow on impact of this might be a 3-4% decline in home prices to compensate.
The bottom is going to fall out of the zombie RE market. Every world gubmint is insolvent, and when it is all finally acknowledged, the whole house of cards will collapse.
The death of fiat is at hand.
Good riddance, I hate those new little cars anyway. Long live the 126.
Follow on impact of this might be a 3-4% decline in home prices to compensate.
Great! Let’s eliminate the pretenders!
While it may seem marginal, Stevens says without a comfortable return of private capital, only the wealthiest borrowers with high downpayments and solid credit scores will be able to purchase a mortgage.
So, what’s the issue here?
Highest Down Payments = 5% and up
Solid Credit Scores = 620 and up
5. Amen….”But the 500 never fully cooperated when we tried to drive it hard. The superlight clutch pedal offered all the resistance of overcooked linguine, and one logbook comment deemed the shifter to be “possibly the worst in any modern car.” Commenters left colorful, unprintable notes about the tepid throttle response as well as excessive wind and tire noise, large blind spots, and a ride that often crashed over bumps. High winds turned our morning commutes into wrestling matches with the steering wheel.”
“It would be counterproductive to make changes to the loan limits before capital is fully engaged,” explained NAR president Gary Thomas.
25 hours per week as a sandwich prep engineer at Panera is capital?
grim [8],
You’re advocating for looser lending standards?
I was in this house last weekend. Words can’t describe the atrocity that is this house. It’s an estate sale so I guess the fat fcuks need to make as much money off of Mommy and Daddy as possible. This place is 50 years old and nothing has been cleaned or updated since it was built. Water damage abounds, the smell is astounding and the decor is “R” rated for horror and violence. They want $529,000 just for the opportunity to come up with another $100,000 to make it liveable:
http://www.njmls.com/listings/index.cfm?action=dsp.info&mlsnum=1334791&dayssince=&countysearch=false
11 – No, I’m saying look at what they do, not what they say.
#12 Gary – your comment is analogous to looking at a piece of vacant land and complaining that there wasn’t even a house on it.
This house is a block away from the horror house I described above. They’re asking 778K for this one; they paid 775K in mid 2008. The correct price is in the 635K range:
http://www.trulia.com/property/1044908699-25-Woodland-Dr-Woodcliff-Lake-NJ-07677#photo-1
30 year [15],
It’s just a matter of time before it becomes vacant land. I think the land the house currently sits on is ashamed.
30 year,
That house @ 529K had the listing agent present. The agent said, “It just needs a little sprucing up.” I had to push my wife into another room as I thought the veins in her neck were going to explode.
The thing I find most interesting is that I see those recently sold homes and I keep repeating, “I didn’t see that one! I didn’t see that house either! Where the he11 was this one listed?”
What it tells me is that the house was already sealed up in a back door transaction and that those who don’t have the proper “connections” aren’t going to sniff the decent houses. I know, I know, by listing the house publically, it will pull in a higher price. But when you have two or three “exclusive” buyers, you already have the bids so the house never has a chance for an outside player.
Whatever game they invent, those on the outside who may be qualified, never get a chance for the good stuff. The outsiders are left to look at the sh1t hoping that they’ll pull the trigger in desperation.
Clot,
Yellen Fed is coming my man. Just money printing like the world has never seen money printing before!!
Hahaha, economy is so bad our buddy Bernanke isn’t going to get to do his taper to try and make the historians believe he was a “prudent Fed Chairman”. In comparison to Yellen though he will look prudent:)
(19) Eddie. Seriously, you are how old and haven’t realized that this game has been in existence since the concept of paid commissions first came into play. Keep patient, scour those FSBO sites, come of those sellers will give up selling FSBO but get an exclusion for yourself if they decide to list. When reality strikes them, they may make their way into your fold. Either way, keep trying. Beat the realtors at their own game.
In my personal case, buying investment properties via listings was the worst way to go.
xolepa [22],
What’s the definition of insanity, doing the same thing over and over and expecting a different result? Yes, I need to take a different approach and stop expecting it to fall into my lap. I totally agree with you. The p0rn industry has more honor than the RE industry.
N.J. town requires beggars to obtain permits
http://www.nj.com/cape-may-county/index.ssf/2013/10/nj_towns_requires_beggars_to_obtain_permits.html#incart_m-rpt-1
I am so happy I bought my house already fixed up. If I paid full price like someone else did for a fixer upper I would have slit my writs by now.
HEHE looks like libs model for runaway inflation is fast approaching. Yellen should be a real winner, nothing like the Fed being an equal opportunity employer. guess it was an incompetent woman’s turn after two incompetent men.
Pain (26):
I cannot wait for March 2014 when the money printing gets boosted to 120 billion/month to help paper over the next decline in the economy. The Fed will buy start buying state debt instruments and more treasuries to help pay for Obamacare.
Eddie,
That 2nd house you listed looks impeccably maintained and updated fairly nicely. I bet they get pretty close to what they are asking.
If it were me, I would offer 400K for the stenchy dump and leave it at that. Then fix it up with a couple of self permits for some of the initial clean-up work and then pay half the taxes of your neighbors until the town revals. Probably save another 10-15K at inspection too.
And THIS is why sending all of our money to the urban schools makes no difference.
http://www.northjersey.com/news/226854451_Achievement_gap_widens_in_Montclair_schools.html
No school system that I am aware of has been making more of a conscientious effort to narrow this gap than Montclair. It’s been mission number one since the 90s. All of the motivational speakers, tax-subsidized pre-K, most expensive library budget in NJ per capita, couldn’t even put a dent in it. When will people learn that the issue is in the home, not in the schools. Fukc it. Send all your dollars to Newark.
Lib [28],
Yes, the house looks well-maintained which is why it should be in the mid 600s. Asking just under 800K is what the s.uckers need to escape financial death. That’s their problem. If they asked 900K and “settled” for 775K, is it a deal?
But when the Davidsons paid $255,385 in 2011 for the house on Birdie Drive, they didn’t know that they had, in essence, bought only from the ground up, and that their homebuilder, D.R. Horton, had kept everything underneath.
“Wait a second, wait a second,” Robert Davidson said after a reporter told him that a search of county records showed that D.R. Horton still owned the oil, natural gas, water and other natural resources beneath his and his neighbors’ homes. “Let me sit down a minute here. They have the mineral rights to the land I’m on?”
In golf clubs, gated communities and other housing developments across the United States, tens of thousands of families like the Davidsons have in recent years moved into new homes where their developers or homebuilders, with little or no prior disclosure, kept all the underlying mineral rights for themselves, a Reuters review of county property records in 25 states shows. In dozens of cases, the buyers were in the dark.
The phenomenon is rooted in recent advances in extracting oil and gas from shale formations deep in the earth, fueling the biggest energy boom in modern U.S. history. Horizontal drilling and the controversial practice of hydraulic fracturing, or “fracking,” have opened vast swaths of the continental United States to exploration.
As a result, homebuilders and developers have been increasingly – and quietly – hanging on to the mineral rights underneath their projects, pushing aside homeowners’ interests to set themselves up for financial gain when energy companies come calling. This is happening in regions far beyond the traditional American oil patch, which has a long history of selling subsurface rights.
http://www.reuters.com/article/2013/10/09/us-usa-fracking-rights-specialreport-idUSBRE9980AZ20131009
Yome,
We already know people don’t read their mortgage docs. Why would you think they would read something like a deed?
Lib,
Their Real Estate Lawyers are not obligated to read the contract either?
What Horton did is not as unusual as you think. No lawyer would find an issue with it as it is way more commonplace than the article leads you to believe. I am not personally supporting what DRH does, but it is not like they were that deceptive. If I’m not mistaken, I think I don’t own the mineral rights to the land that my multi sits on in Montclair. I know this as I took the five minutes to read my deed.
I’ll look tonight when I get home.
19.
Fast Eddie,
Likely spot on. The house I live in now was a drive by transaction. Was going to cut the realtor out of the deal considering the builder and I agreed on a price. Problem was my realtor was also selling my Pos.
he (20)-
My fervent wish is that Bernank is back in academia when the whole tuition bubble goes poof.
I’d love to see that criminal delivering Domino’s to make ends meet.
20.
With yellen confirmed Im not sure how anyone can be totally out of the market. We could be looking at Dow 30,000 in a few years. QE to infinity. All the tapering BS is just rhetoric. Talk the market down then shock them with double 150 billion/month.
hype (27)-
The next step leading to total necronomic collapse will be capital controls, a Cyprus-style bail-in and forced pension and IRA purchases of Treasuries.
…and let’s not forget gold confisc@tion…
Yellen was my second choice but I will take her. Keeping rates low and stocks high truly is the lords work. She will one day be St. Yellen.
Puerto Rico is next bail in.
Spine Snapper says:
October 9, 2013 at 12:09 pm
hype (27)-
The next step leading to total necronomic collapse will be capital controls, a Cyprus-style bail-in and forced pension and IRA purchases of Treasuries.
http://www.justiceforjaymeezee.com/
I just read that most healthcare plans cover flu shots. Just a heads up folks.
Also, Groupon of Orlando FL has a $30 for $50 on GradSave which is easy to transfer into a 529. Pay with your Discover card and link through Upromise and it becomes closer to $25 for $50 when you factor in the 5% Discover is giving you and 8% Upromise is giving you. Who doesn’t like a painless and free $25. Thank Captain Cheapo later.
3,330 raised by 105 people in 8 days.
You can see where his support is.
By the way, I was shocked that I was the 11th purchaser of that 529 Groupon. The Playboy subscription deal at 50% off cover price had over 1,000 bought. This speaks highly of our nations’ personal priorities.
Justice for Alexian Lien: $2540 raised
http://www.gofundme.com/4lb9bc
Justice for Jay Mezee: $3330 raised
http://www.gofundme.com/4l8kzo
Lien doesn’t need the money.
Those 2 sights are probably frauds anyhow,
AG [36],
It’s most definitely the case. And you would think I would know better. I give people way, way too much benefit of the doubt. That ship has sailed. If I decide to re-list my house, the price tag is going above the comps. Don’t like it? F.uck em, let them pay for a piece of sh1t.
JJ,
Where are you?!! We need another 300 point drop to pile in!
Sovereign Default World Tour: Argentina Update
http://manhattancontrarian.com/blog/2013/10/7/argentina-bond-default-now-it-starts-to-get-interesting
Robert Shiller: Janet Yellen Will Be A ‘Terrific’ Fed Chairman
http://www.valuewalk.com/2013/09/robert-shiller-janet-yellen-will-terrific-fed-chairman/
The best and most prudent thing the US could do right now is default outright.
Things would be tough for a few months, but- just as in personal BK- sometimes wiping the slate clean is the best that can be done.
Of course, count on the US to continue digging its own financial grave. Why just tap out ourselves, when we can take down most of the planet with us?
“The next step leading to total necronomic collapse will be capital controls, a Cyprus-style bail-in and forced pension and IRA purchases of Treasuries.”
Clot, this is what truly concerns me. Once Yellin burns out the printing press this is the logical next step. I say we have about another 5 trillion to print before the Feds balance sheet explodes so 120-150 billion/month of printing goes gets us another 3 years of free money. Enough time for Obama to get the hell outta Dodge and leavesit for the next president.
Plan accordingly
Apartment market in New Jersey: Supply may outpace demand
http://www.nj.com/business/index.ssf/2013/10/apartment_market_in_new_jersey.html#incart_river_default
The number of apartment units in northern New Jersey built through the 3d quarter of this year rose by 70 percent over the same period last year, posing a challenge for landlords and owners as supply is outpacing demand.
According to a quarterly report from Marcus & Millichap, a real estate investment services firm, developers completed 1,700 rentals over the past 12 months, up from 1,000 over the previous period. About 1,840 are expected to be completed before the year’s end, compared to 1,240 in 2012.
About 4,600 additional units are underway for 2014, and 6,600 more are in the planning stages.
Although jobs are up, the report found vacancy rates increased slightly from last year to 3.5 percent, below the national average of 4.3 percent, according to rent.com. The largest increase occurred in Bergen County, where the number of empty apartments rose by 1.2 percent to 5.6 percent.
In Hudson County, with easy access to Manhattan, about 2.4 percent of apartments are vacant.
Year-over-year, rents rose 4.3 percent to an average of $1,810 per month, according to Macus & Millichap.
Passaic County led the way with 8.4 percent rental increases – about $1,250 a month — because of a limited supply of new units. With a vacancy rate of 3.4 percent and few new buildings being constructed, Marcus & Millichap predicts Passaic rents will continue to set the pace.
Demand for apartments remains strong in Hudson County, which has the highest average rents in the region. The county’s rents have risen 3.8 percent to $2,838 per month. Bergen County’s access to the George Washington Bridge allows landlords to command the region’s second highest rents — $2.195, even though they dropped 0.7 percent from last year.
Marcus & Millichap forecasts rents will rise 3.9 percent this year over last.
Spine (55),
Why deafult on an unsecured loan before maxing out the credit line. The world will continue to send us containers of goods and money in exchange for IOU’s. They like to watch us party. When paymement is due print some $ to pay the interest only and rollover debt. No inflation in sight as long as a small % of the interest only is hitting the economy and money supply. This party could last for another 50 years. Stop hating.
Has Argentina ever paid a bond to maturity? All it will take is one of these spectacular sovereign blowups every few years and the party can last forever!
We are fast becoming a nation of part-time workers. These jobs do not generate enough payroll deductions to support the government, Social Security, Medicare or all the gifts made to the oh so deserving free stuff army. Making paper money out of wishes and unicorn farts does not change the fact that we are flat a$$ broke.
Eddie – Why do you keep banging your head on the walls of Woodcliff Lake houses?
Looks like the neighbors are set to move in any day, I’ll bet they got the place for close to $610k, down from the $750k the old neighbors paid a few years back. Completely done, everything, beautiful house, beautiful neighborhood, 5br, huge rooms, open concept, pottery barn paint, a kitchen that would make most jealous, nice finished basement. Absolutely nothing do to, hell they even had contractors out there for two days doing some minor repairs before they moved out (they took a bath and then some).
Wayne not hoity-toity enough for you? And don’t tell me you need to be in BC, graduation day is just around the corner now. :) Besides, Franklin Lakes is only 5 minutes away if you need to get your fix of $15/lb pasta salad at Market Basket. They might even let you join Indian Trail if you polish the car up nice.
grim,
Wayne is perfectly fine but two years away because of graduation day. :) DePaul would have made life so much easier!! Believe me, once said child is done, Wayne is on the table if nothing happens between now and then. And that house for 775K ask is ridiculous!
http://www.ritholtz.com/blog/2013/10/household-debt-to-income-ratio-usa-vs-canada/
Let’s just wait for Canada to implode and take all their oil and gold… eh?
Let me know when the bid meets the offer on that one! :P
re # 55- re: “before maxing out the credit line” You are correct there is no challenger for the enormous size of US Treasury Bond holdings, it is a safe bet for now. I do however believe that runaway deflation could happen to do the enormousness of private sector debt. Bernake is out at the in January, and right now there no telling what Yellen will do other than she has spoken publicly about her worries about private sector debt.
She might spook the markets enough to cause a real crash, one that they cannot arrest since the FED is now prohibited from buying up private sector debt.
Rags: re: Grim [60];
Let’s just wait for Canada to implode and take all their oil and gold… eh?
Just like the San Sebastian mines. Great plan.
Debating stocks or maybe Puerto Rico Munis in a full stampede if I can get them at a 10% yield and pray for a bail out.
Saw some 30 year PR bonds with a 5.5 coupon trading at 67 today and almost pulled trigger. If I get them at 55 in ten years of coupons get back 100% of principal and then 20 years more of interest and a boom at the end face value.
Fast Eddie says:
October 9, 2013 at 1:16 pm
JJ,
Where are you?!! We need another 300 point drop to pile in!
Yellen is jewish and from brooklyn, I like her already.
Just wondering if one night at L’Amour in Brooklyn me and her shared a coke spoon or something.
The time will come when they come for the 401-k’s – it is a given. Poland and other countries have in one respect or another.
LOL – Lonegan called Booker the Hollywood standin for Obama….
In the words of BC Bob, if Janet is Yellin, you must be sellin’.
CONTINUED…
City. Some in this group of motorcycles were intentionally slowing down other cars on the road so that the rest of them could pass safely.
Kevin Bresloff turned on his helmet camera shortly after the riders encountered the black Range Rover, says his lawyer, Andrew Vecere. “From speaking to him, what he saw – or what he believes that he saw was a water bottle come out of the sunroof of the car,” Vecere said.
Asked he is referring to the SUV — and if someone threw it — Vecere said, “Yes, correct.”
What happened next is not in dispute.
http://m.cbsnews.com/storysynopsis.rbml?&pageType=cbsthismorning&catid=57606470&feed_id=30&nb_splitPage=1
[41] JJ,
We basically have capital controls. The HEART Act and FATCA are essentially stealth capital controls guised as tax evasion measures. There are others. They have the effect of restraining cross border money flows and, in the case of FATCA, ring-fencing wealth so it cannot easily go outside the US. Liberals will argue that this is evidence of illicit activity purged from the system but it is actually the US trying to impose its will on sovereigns and foreign actors. Many have decided it isn’t worth it, or they don’t want to be beholden to the US government, and told Americans to take their business elsewhere. A lot of babies are being thrown out with the bath water, but no worry, we will still be the haven of choice for Chinese businessmen and corrupt officials.
When the only regimes deemed worse than your own are communist or third world jerk water dictatorships, that isn’t good.
#69
Are the street thugs now supposed to be eco vigilantes? Lame story.
Comrade,
When’s the last post you made with no mention of “the left” or “liberals” ?
[72] Joyce,
Don’t recall. Perhaps insulting Fabius. But I suppose that’s implied.
It speaks to Lien’s intent. He was not an innocent driver surrounded by scary bikers. He was angry that they were making him late…
72.nwnj says:
October 9, 2013 at 9:33 pm
#69
Are the street thugs now supposed to be eco vigilantes? Lame story.
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