"Chase appears to be the first bank (that we know of) that is moving to lower conforming loans limits. According to our sources, the bank has to have its $729,750 loans locked in by the end of the business day today and close by September 30th . Starting tomorrow their high balance loans will be capped at $625,500."
That means that starting tomorrow at Chase, any NYC loans over $625,500 (versus $729,750 today) will be considered jumbo loans and priced accordingly.
"They're lowering the rate because our lovely government has decided to take away the current provisions they have in place for high cost cities (Boston, NYC, etc.) as it relates to jumbo rates," Apple, Peeled co-founder and Wharton-educated real estate broker Ana Maria Sencovici explained to BrickUnderground when we asked for a catch-up on the mortgage market soap opera.
"If you recall," she says, "jumbo used to be anything over $417k, until 2008, when the goverment stepped in and said 'Ok, we realize that your housing markets are much more expensive and so we'll try to provide more lending liquidity in your markets by lifting that cap and therefore making sure the secondary market for these loans get an injection.
"Now, they're taking this away, effective September of this year. No one knows if the limit will come down in the $600k's or back to the $400k's yet ... but what Chase is basically doing is cutting off NEW loans now to this new limit, basically betting on the fact that they're not likely to close on these new loans prior to the September deadline....This is all that we know so far and it's a fluid time for this where nothing official has come out as far as we know or have heard from our sources."
(The Apple, Peeled)
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