The temporary conforming loan limit of $729,750 in high-cost counties was set to expire at the end of the year, but banks are pulling back on that and requiring all loans at this loan amount range to close by December 1st – NO exceptions.
With rates having dropped yesterday, some people in the $625,500 – $729,750 loan amount range are taking advantage of the limited opportunity. But because a 30 day lock period will take us past the December 1st deadline, I’m locking my clients on a 15 day lock period and will pay to extend the lock period by another 7 days. (Although not impossible to close in 15 days, sometimes it can be tight).
What this all means is that we’ll be in limbo for the month of December or until banks decide what to do and when to implement the new conforming loan limit of $625,500 for January 2009. After December 1st, I don’t expect any activity in the refi or purchase market for those requiring loans above the true conforming limit, which is $417,000.
