Congress passed the economic stimulus package, which was intended to raise the jumbo loan floor from $417,000 to $729,750. This is because government-chartered mortgage banks like Fannie Mae will only buy loans up to the current floor of $417,000.
This was supposed to boost the economy by:
A) Making it easier for owners of more expensive homes to refinance,
B) Allow buyers to rescue their homes out of foreclosure
C) Encourage the purchase of more expensive homes (those needing mortgages over $417,000 would be able to get them without paying a ridiculous jumbo interest rate)
So the “stimulus” package passes Congress, raising the loan limit, but only in areas of the country where houses are highly priced.
If you live in California or Connecticut, congratulations. If you live in Ohio, you’re out of luck. In Ohio, only 1 county is considered “high cost”. So unless you live in Athens county, this part of the “stimulus” package works about as good as two wet cats in a bag.
Pathetic? Of course.