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March 27th: OFHEO sets minimum $417k loan amount through 2009, and news from Citi, GMAC, and Wells’ new broker disclosure form

March 27th, 2008 · No Comments

march-27th-ofheo-sets-minimum-417k-loan-amount-through-2009-and-news-from-citi-gmac-and-wells-new-broker-disclosure-form

As I was in the supermarket check-out line last night, staring absent-mindedly at the cover of the April issue of GQ magazine, I was brought back to reality by the clerk giving me my total bill. “Holy smokes!” When did food become so expensive? As it turns out, higher oil prices, bad weather, growing consumer demand, and lower food reserves are all combining to drive up prices. Food prices here in the US were up 4% last year, and are expected to match that in 2008. The CPI and PPI numbers have “core” rates that factor out food and energy, but which is always a source of controversy since people need to eat and often commute. And the thinking goes, if the average person is spending more on food & energy, they will spend less on “optional” purchases such as new stereos, new clothes, or new furniture.

  • Wells Fargo wholesale brought out the note on the mortgage broker fee disclosure, effective after April 1. “If you choose to pay your mortgage broker fees through a higher interest rate and your loan has been locked, your mortgage broker will tell you the amount of the mortgage broker fee that the lender is paying to the mortgage broker. The amount of the mortgage broker fee paid by the lender may vary depending on the loan product and terms, as well as the lender with whom your mortgage broker places your loan. Be sure that you understand and are satisfied with the product and terms that have been offered to you….”
  • OFHEO is issuing a final Guidance that provides that the conforming loan limit would not decrease from its current level of $417,000 in 2009 and subsequent years. However, the conforming loan limit will not increase until cumulative increases in house prices exceed cumulative decreases since the $417,000 limit was first reached. “This revised Guidance responds to the comments that we received and OFHEO’s belief that stability in the mortgage market is very important,” said OFHEO Director James B. Lockhart.
  • CitiMortgage announced the immediate availability of Phase II of the new FHA Economic Stimulus Mortgage Limits. Citi stated that “the changes in loan limits are applicable to all FHA-insured mortgag