'New' Conforming Loan Limits Look -- Limited

refi_no_refi.jpg

Before you all go running to your mortgage brokers, screaming to refi your adjustable rate mortgages into good ol’ 30-year fixed rate loans under the “new temporary” conforming loan limits agreed to in the recently-signed stimulus package, take a breath.

It might not be all Congress cracked it up to be.

The new limits for the GSEs (government-sponsored enterprises), under the new law, are 125 percent of the local market’s median home price--which will apparently be determined by HUD sometime soon.

That said, last Friday (and forgive me for taking the day off), the Securities Industry and Financial Markets Association sent out a press release indicating that the “new” loans would not be allowed to be included in existing “conforming” loan pools. They are apparently going to be securitized “under unique pool codes for trading on a “specified pool” basis or inclusion in Real Estate Mortgage Investment Conduit (REMIC) transactions.”

So what does that mean to you and me and our home loans?

An excellent source, Craig Strent of Apex Home Loans, says, “That seems to indicate they will not get the best conforming rates, but more likely some kind of middle ground rate between conforming loans at $417k and below and jumbo loans that are still above the temporary increase.”

So much for my new refi. Strent adds, “This certainly would detract from the benefits the temporary increase was supposed to have in the housing market.”

Questions? Comments? RealtyCheck@cnbc.com