BofA and High Cost Area Jumbo Conforming loans.

NEW -> Contingent Buyer Assistance Program
sgip

sgip

Well-known member
This was from a post on Redfin, so I confess early on that it is for now something I'm unable to verify. Has anyone run into this yet? If so, it's a big, big deal IMHO

"FYI - just got an email from my lender at Bank of America about the jumbo conforming limit coming down to $625,500 at the end of September.  Apparently, at least for Bank of America, applications must be submitted by June 30th in order to obtain the conforming rate for balances up to $729,750.   A month ago when I talked to him, the spread between the conforming and non-conforming rate for a 30 yr fixed was at just around 1/2 percent.  So this is probably going to put some additional pressure on prices as well - the extent to which is hard to estimate."

My .02c

Soylent Green Is People.

 
I wonder if they are putting in that deadline so they have enough time to close and package them off for sale to Fannie/Freddie by Sept 30th.  What are other lender time tables for getting in the higher loan amounts?
 
Yep. Most lenders will start declining to originate loans greater than $625,500, conforming OR FHA, in the next 60 days. Any loan over the expected limit reduction will be a higher rate standard jumbo and require more down.
 
FCB = Foreign cash buyer.  While its true that they will not need a loan it doesn't mean they want to OVERPAY for a product.  I'm guessing that on an older property the cash buyer will be going for most bang for the buck. 
 
Well, it's official for us. July 15th is our cutoff date. BofA's cutoff date was confirmed by another source, with Chase ending HCAJC loans even earlier in some parts of the country.

Check with your lender directly and get whatever you can in writing from management as to the end date of originating these lower rate loans before committing to a lender. In the mean time if you're buying and need a mortgage over $625,500, be ready no matter the bank you work with for 1/2 percent higher in rate compared to traditional Conforming loans, along with generally more restrictive underwriting.

My .02c

Soylent Green Is People.
 
sgip said:
Well, it's official for us. July 15th is our cutoff date. BofA's cutoff date was confirmed by another source, with Chase ending HCAJC loans even earlier in some parts of the country.

Check with your lender directly and get whatever you can in writing from management as to the end date of originating these lower rate loans before committing to a lender. In the mean time if you're buying and need a mortgage over $625,500, be ready no matter the bank you work with for 1/2 percent higher in rate compared to traditional Conforming loans, along with generally more restrictive underwriting.

My .02c

Soylent Green Is People.
Click to expand...
Does the new $625,500 loan limit also apply for FHA and VA loans?
 
Yes. FHA and VA limits are ratcheted down at the same time Conforming Conventional loans go as well. I know that there aren't a huge number of these loans funded in Irvine, but there are quite a few throughout the County of Orange. Think "contagion" here. Once sellers in Tustin, Costa Mesa, or Laguna Niguel start feeling price pressures from lack of buyers, Irvine will begin to feel the pinch as well.

My .02c

Soylent Green Is People.
 
sgip said:
Yes. FHA and VA limits are ratcheted down at the same time Conforming Conventional loans go as well. I know that there aren't a huge number of these loans funded in Irvine, but there are quite a few throughout the County of Orange. Think "contagion" here. Once sellers in Tustin, Costa Mesa, or Laguna Niguel start feeling price pressures from lack of buyers, Irvine will begin to feel the pinch as well.

My .02c

Soylent Green Is People.
Click to expand...
It'll be interesting to see what kind of price pressure this does bring over the next quarter.
 
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