A plan to jumpstart homebuying
I hadn't seen where Omaha/Council Bluffs, Neb., had been upgraded to a high-cost area, so I'm assuming that metro, like the rest of Nebraska, was stuck at a loan limit of $417,000 for a single-family home, which seems weird considering such well-known companies as Berkshire Hathaway Inc. are based there.
If Warren Buffet and other Berkshire Hathaway executives wanted to get a conventional mortgage for a home that I'm pretty sure would be worth more than $417,000, they wouldn't be able to do so. Why discriminate against Warren Buffet just because he lives in Omaha and not in New York?
(At the end of 2010, the Federal Housing Administration announced its loan limit ceiling for fiscal year 2011, also establishing a high-cost-area maximum of $729,750. The old FHA Forward loan maximum for Omaha/Council Bluffs was $271,050 for a single-family home.)
"Raising the conforming loan limit to $729,750 nationwide would spur home sales and allow many jumbo mortgage holders to refinance into the historically low rates that are currently available," Walsh said.
He added, "If I'm going to apply the same underwriting guidelines, appraisal standards, credit standards and down-payment standards, why shouldn't I be able to do these loans across the county. It would definitely spur the purchase market -- and it would spur the refinance market as well."
Steve Bergsman is a freelance writer in Arizona and author of several books. His latest book, "After the Fall: Opportunities and Strategies for Real Estate Investing in the Coming Decade," has been ranked as a top-selling real estate investment book for the Amazon Kindle e-reader.
|Contact Steve Bergsman:|
|Letter to the Editor|
Top 5 posts of the week
What's Your Home Worth?