New act would allow electronic filing of mortgages

New act would allow electronic filing of mortgages

September 7, 2005

Fannie and Freddie announce 2005 loan limitsMortgagePress.comLoan Limits,Fannie Mae,Freddie Mac
Using federal data on average home prices, the Office of Federal
Housing Enterprise Oversight (OFHEO) has established new loan
limits for Fannie Mae and Freddie Mac. Fannie Mae will increase its
single-family mortgage loan limit to $359,650, and Freddie Mac will
raise its limit from $333,700 to $359,650, effective Jan. 1.
As a result of the new loan limit, Fannie Mae estimates that in
2005, as many as an additional 271,524 homeowners would be eligible
for a conforming loan, while Freddie Mac foresees an additional
340,000 families obtaining lower-cost mortgage financing. Freddie
Mac estimates that the total mortgage interest savings for a
borrower with a typical 30-year, fixed-rate mortgage at the new
conforming loan limit is as much as $24,800 over the life of the
loan.
OFHEO, the safety-and-soundness regulator of Fannie Mae and
Freddie Mac, established the new ceilings on mortgages that can be
purchased or securitized by the government-sponsored enterprises by
taking into account the fact that the two secondary-market giants
failed to make a $2,300 downward adjustment in average housing
prices when calculating the 2004 ceiling. Had OFHEO not
incorporated that adjustment in the 2005 maximum, the limit would
have been $362,000.
The loan limits adjustments are based on the October-to-October
changes in the mean home price, as published by the Federal Housing
Finance Board (FHFB). The FHFB figures come from its monthly survey
of lenders, which includes new and existing homes. The average for
both new and exiting homes in October was $264,540, up 8.53 percent
from $243,756. But because of last year's procedural error, the
increase in the limit for 2005 will only be 7.8 percent.
Fannie Mae limits for multi-unit loans for 2005 will be as
follows: two-family loans, $460,400, three-family loans, $556,500
and four-family loans, $691,600. The 2005 loan limit for second
mortgages will be $179,825. The new Freddie Mac loan limits for
mortgages on one-to-four family properties will be: $359,650 for
mortgages on one-family properties (up from $333,700), $460,400 for
mortgages on two-family properties (up from $427,150), $556,500 for
mortgages on three-family properties (up from $516,300) and
$691,600 for mortgages on four-family properties (up from
$641,650).
The maximum amounts for one-to-four-family mortgages and second
mortgages in Alaska, Hawaii, Guam and the U.S. Virgin Islands are
50 percent higher than the limits for the rest of the country.
Because of the higher conforming loan limits, the ceilings on
federally backed mortgages will also increase next year, but it is
unclear whether they will be based on the OFHEO-adjusted
figure.
For more information, visit www.fanniemae.com or www.freddiemac.com.

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