Tell EVERYONE about the NEW FHA LOAN LIMITS!!

I have some information for you and other real estate professionals that is a breath of fresh air.

The new loan limits have come out for FHA and since the real estate industry considers FHA as the new Alt-A loan program this means that more people will qualify to both purchase new homes and refinance out of bad loans!

Here are the new FHA loan limits! They are significantly higher then expected! Let me know if you need any further information since this program is the loan of the future for non-prime borrowers. These FHA loan limits can go into effect as early as next Thursday!

Three things to keep in mind are that:

1. FHA does not require reserves!

2. Although FHA is subject to risk based pricing, FHA is not fico driven!

3. FHA has the option of 30 and 15 year loans (fully amortized no interest only)!

4. The FHA secure program which is only available until Dec. 31 2008 can refinance people with negative equity. (Call for details)

The memo is below:

NEW FHA LOAN LIMITS BY COUNTY

At a speech today in Orange County, HUD Secretary Jackson announced the new limits for California. Attached are the limits by county. They appear to be about as high as we could have expected. The limits for the rest of the country should be published tomorrow. We understand that FHA will require second appraisals on loans over a certain limit (possibly $417,000) if the following conditions exist: 1) LTV is above 95%, 2) the appraiser has designated the property in a declining market and there is data that corroborates that fact. Mountain West Financial is pleased to announce we will be underwriting and approving loans at the new limits and will advise you as soon as we are in a position to lock loans at these new limits.

California County Limits

Obs	prop_addr_st	county_nm	med_price	FHA_1unit
185	CA	Alameda County	995000	729750
186	CA	Alpine County	438000	547500
187	CA	Amador County	355000	443750
188	CA	Butte County	320000	400000
189	CA	Calaveras County	370000	462500
190	CA	Colusa County	318000	397500
191	CA	Contra Costa County	995000	729750
192	CA	Del Norte County	249000	311250
193	CA	El Dorado County	464000	580000
194	CA	Fresno County	305000	381250
195	CA	Glenn County	230000	287500
196	CA	Humboldt County	315000	393750
197	CA	Imperial County	260000	325000
198	CA	Inyo County	350000	437500
199	CA	Kern County	295000	368750
200	CA	Kings County	260000	325000
201	CA	Lake County	321000	401250
202	CA	Lassen County	200000	271050
203	CA	Los Angeles County	710000	729750
204	CA	Madera County	340000	425000
205	CA	Marin County	995000	729750
206	CA	Mariposa County	330000	412500
207	CA	Mendocino County	410000	512500
208	CA	Merced County	378000	472500
209	CA	Modoc County	125000	271050
210	CA	Mono County	370000	462500
211	CA	Monterey County	599000	729750
212	CA	Napa County	615000	729750
213	CA	Nevada County	450000	562500
214	CA	Orange County	710000	729750
215	CA	Placer County	464000	580000
216	CA	Plumas County	328000	410000
217	CA	Riverside County	400000	500000
218	CA	Sacramento County	464000	580000
219	CA	San Benito County	790000	729750
220	CA	San Bernardino County	400000	500000
221	CA	San Diego County	558000	697500
222	CA	San Francisco County	995000	729750
223	CA	San Joaquin County	391000	488750
224	CA	San Luis Obispo County	550000	687500
225	CA	San Mateo County	995000	729750
226	CA	Santa Barbara County	615000	729750
227	CA	Santa Clara County	790000	729750
228	CA	Santa Cruz County	719000	729750
229	CA	Shasta County	339000	423750
230	CA	Sierra County	228000	285000
231	CA	Siskiyou County	235000	293750
232	CA	Solano County	446000	557500
233	CA	Sonoma County	530000	662500
234	CA	Stanislaus County	339000	423750
235	CA	Sutter County	340000	425000
236	CA	Tehama County	250000	312500
237	CA	Trinity County	200000	271050
238	CA	Tulare County	260000	325000
239	CA	Tuolumne County	350000	437500
240	CA	Ventura County	599000	729750
241	CA	Yolo County	464000	580000
242	CA	Yuba County	340000	425000

Final Thought

"You can't build a reputation on what you're going to do."

~ Henry Ford

Since we are either proactive or reactive, I urge you to reach out to EVERYONE you can and connect with them! Too many people are paralyzed by the bad media and the fear that grips the general populace.

By letting them know that “money is on sale”, because interest rates are so low and inventory is so high, we are all experiencing the epitome of a home buyers market.

The favor lies with the buyers and the sellers that know how to capitalize on the oppurtunities available for buyers...ie the 3-2-1 buydown, ect.

Home Page

Economic and Mortgage Market Summary (Feb)

FannieMae came out with the economic summary for February 2008 and the key points are listed below.

FannieMae (February 2008) Economic and Mortgage Market Developments

• Inflation. The core rate of inflation increased further in December and remains above the top of the Federal
Reserve’s implicit target range. The slowdown in GDP growth and resulting slack in the labor market should
help alleviate some pressure on core inflation (especially as monetary policy has become accommodative).
However, there is continued pressure on core inflation from the pass-through of recent energy price increases.

• Interest rates. The Federal Reserve lowered the federal funds rate by 125 basis points in January, and continued
credit tightness and softening economic conditions should allow them to lower it more this year. We expect the
Fed to cut rates by 50 bps in March, and by an additional 50 bps over the next several meetings, bringing the
federal funds rate down to 2.00 percent. Nevertheless, long-term rates should edge up from current levels over
the year.

• Housing market. We project that the combination of below-trend economic growth and continued dislocations in
the mortgage market will continue to slow housing starts and sales this year. We expect total home sales to
decline by 22 percent in 2008 and single-family housing starts to fall by 30 percent in 2008. We expect housing
starts and sales to stabilize in the middle of this year, with sustained gains beginning in 2009. However, the large
number of unsold homes on the market is putting downward pressure on house prices. This price weakness is
likely to extend at least through 2009.

Molly R. Boesel and David Kogut
Economics and Mortgage Market Analysis
February 15, 2008

In other words…

~Inflation is increasing and the fed is working to slow it. They still don’t have control over it and the way things look; the market will be unstable until the housing market volatility slows down.

~As for interest rates, the Fed continues to cut rates but long term rates (30yr and 40yr) will continue to climb through the course of the rest of the year.

~The housing market will continue to decline throughout 2008, is expected to stabilize in mid 09’ and the increase in inventory is only increasing the the weakness in the housing market.

Regardless of the news, the bottom line is that everyone is waiting to see what the rest of everyone else is going to do. People are paralyzied by the market and don’t want make a bad move. Make no mistake, now is the best time to buy a home in the last 10+ years. Money is incredibly cheap with rates being so low, and the inventory and standard concessions that sellers are making across the market, make this the epitome of a buyers market.

Those that buy or refi at this point are wise and will reap the benefits of this favorable market. Those who chase the rainbow and keep searching for the “Bottom” of the market, or for the rates to go down- will find that it doesn’t exist because they will always feel that there is always something better and when the market actually begins to flourish the inventory will be compromised and according to the fed and the inflation issues, rates will have gone up. Another thing to keep in mind is that on a $250,000 investment, an increse in rates of .5% will decrease their buying power by about $30K


Final Thought…

There are risks and costs to a program of action. But they are far less than the long-range risks and costs of comfortable inaction.

-John Fitzgerald Kennedy

Don't Get Burned by the HELOC Freeze

There’s a growing trend among lenders that I feel compelled to tell you about.

Several major lenders are freezing withdrawals from Home Equity Lines of Credit (HELOC's) – and I don’t want you to be caught off guard by this development.

Don’t Get Burned by the HELOC Freeze

HELOC's, though secured by your real estate, are treated by lenders as consumer credit. And just as a lender can revise the terms of your credit cards, or even cancel them, the same can be done with your HELOC.

Previously, HELOC withdrawals were usually only frozen for reasons such as bankruptcy, declining credit and payment problems.

While these events can still cause a freeze, there’s another factor that lenders are considering more often today: the value of your property. You should be aware that the lender retains the right to suspend or reduce the line of credit available if your property value falls below the appraised value used to originate the loan. Lenders are actively assessing properties and then suspending access for account holders who have seen a downward slide in their home value.
If you’re in a market that has seen real estate values decline, then access to your HELOC may be at risk.

*One thing to keep in mind is that lenders have labeled all of California a declining state, which means that those who live in California and have HELOC's are at risk to the HELOC Freeze and this risk should be assumed and recognized.

Your financial security and success are my highest priority. Feel free to contact me to discuss your options and any other questions you may have so I can make sure that you are protected in this volatile market.