Current Loan Limits Expire Friday

I copied the article below from the most recent C.A.R. Newsline, a newsletter published by the California Association of Realtors and the Beverly Hills/Greater Los Angeles Association of Realtors. If anyone is shopping for a large conforming loan in LA County in the $729,750.00 range or less, you have only one more day to secure it before the loan limits are reduced to $625,500.00 maximum. Please read the particulars that follow.

“Current conforming loan limits are scheduled to expire Friday, Sept. 30.  The maximum FHA, Fannie Mae, and Freddie Mac conforming loan limit will decline to $625,500 beginning Oct. 1, 2011, from the current $729,750 limit, though the majority of counties will fall far below the $625,500 maximum.  The conforming loan limit determines the maximum size of a mortgage that FHA, Fannie Mae, and Freddie Mac government-sponsored enterprises (GSEs) can buy or guarantee.  Non-conforming or jumbo loans typically carry a higher mortgage interest rate than a conforming loan and require a higher down payment, increasing the monthly payment and negatively impacting housing affordability for California home buyers.

Congressmen Gary Miller and Brad Sherman jointly introduced a bill in the house that would have made permanent the current loan limits, and Congressman John Campbell introduced a bill that would have extended the current limits.  Additionally, Senators Dianne Feinstein and Barbara Boxer jointly cosponsored a bill in the Senate that would have extended the conforming loan limits.

Although bills were introduced to extend and to make permanent the current conforming loan limits, it is unlikely Congress will take action by the Sept. 30 deadline.

C.A.R. and NAR will continue to remain vigilant in this area and hope that elected officials also will continue this fight on the hill.”

Condo Conversions Back on WEHO Agenda

According to the WEHO News, the city council is once more considering easing restrictions on condo conversions in West Hollywood. The reasons given are that the city’s stock of apartments is aging, and landlords do not have the means to recoup long deferred maintenance costs of necessary repairs from the tenants, meaning that electrical and plumbing repairs just get worse, instead of being adequately repaired.

Advocates of the condo conversion approach are hoping that the public will consider a “tenant centric” approach, one important major caveat being that existing tenants will not be evicted, and that all tenants will be offered the chance to buy the units they inhabit. This all sounds good initially, but there is the real question looming like the elephant in the room…how can the renters afford to buy the apartments that they occupy? If they could afford a condo, they would probably have already purchased one. Also, how will these altruistic ideas translate into reality sometime down the road when the apartment owners decide to petition the city for more leniency in the rules so that they can sell enough units to make the project profitable?

The city has tabled the issue until a future meeting.