Hot off the presses! I thought you might enjoy this reading. If it in fact turns out that the bill is signed into effect by the President we will see an impact with regards to lower down payment requirements for FHA, higher loan limits for FHA and conforming loan balances. What this means to you as a homeowner is if you have a current loan at $600,000 it is considered jumbo. With the mortgage liquidity problems rates on home loans that are considered jumbo are extremely high because they currently aren’t within FNMA loan limits. If they increase the loan limits for both FHA, VA and Conventional loans it would allow you to refinance your home from its potential high jumbo rate into alignment with FHA rates from anywhere at 6% -6.5% depending on how you structure your refinance. This could be a great help to those who earn higher incomes and have been paying higher rates for borrowing money based off of their needs~

If you want to be kept up to speed make sure to email me or call (303)779-0591 ~ Ray

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“House approves bill helping mortgage borrowers

WASHINGTON (MarketWatch) — Reaching out to hard-hit borrowers in the subprime-mortgage market, the House on Tuesday passed a bill that lowers down payments for borrowers, raises loan limits and boosts funds for housing counseling.

Passed by a vote of 348 to 72, the bill reforms the Federal Housing Administration and is the latest lifeline thrown to borrowers from Washington as the fallout in the mortgage market continues.

About two million loans are expected to reset to higher rates in the next two years, with defaults expected to follow. Congress and the White House have floated various proposals to stem the damage.

The bill directs up to $300 million a year into an affordable housing fund. A motion offered by Rep. Jeb Hensarling, R-Texas, to kill the fund was rejected.

‘We do not have a general program for helping build affordable family housing, and that’s what this bill would do.’

Rep. Barney Frank, D-Mass

“We do not have a general program for helping build affordable family housing, and that’s what this bill would do,” said Rep. Barney Frank, D-Mass., the chairman of the House Financial Services Committee.

Lawmakers also passed an amendment to the bill offered by Frank that would raise the agency’s loan limit from its current $417,000 to as much as $729,750.

“Such an increase would ensure that FHA is a viable option for borrowers who have payment option and interest-only adjustable rate mortgages (ARMs), which will be resetting in the next few years,” said Stanford Group Company analyst Jaret Seiberg.

However, the Bush administration has registered opposition to that and other key parts of the House bill.

“The program should remain targeted to traditionally underserved homebuyers, such as low- and moderate-income families,” the White House said in a statement on Monday.

The National Association of Mortgage Brokers supported the amendment raising the loan limit.

“Because FHA has been driven from those parts of the country where consumers are most in need of affordable financing, such as California, millions of borrowers have been forced to turn to high-cost financing and other non-traditional loan products,” wrote NAMB President George Hanzimanolis, in a letter to lawmakers.

The bill eliminates down payment requirements on FHA loans. The requirement is currently 3%.

Some Republicans opposed the housing fund. “A better approach is to dedicate the FHA surplus to shoring up the financial solvency” of an agency program, said Rep. Spencer Bachus, R-Ala. Frank, however, said that no money would go to the trust fund until FHA solvency was certified.

The Senate Banking Committee is scheduled to debate its own FHA bill on Wednesday. President Bush would need to sign a final version for the bill to become law.

In separate action on Tuesday, the House Financial Services Committee approved a bill granting new authority to the FDIC and the Office of the Comptroller of the Currency to write rules against deceptive lending practices. Traditionally only the Federal Reserve has had such powers. The bill would need to be approved by the House and the Senate to become law.

Tuesday’s House vote came as the Fed unanimously voted to cut its overnight interest rate target by a half percentage point to 4.75%, citing turmoil in financial markets as a threat to economic growth. See full story.

“The tightening of credit conditions has the potential to intensify the housing correction and to restrain economic growth more generally,” the central bank said in its statement Tuesday.”