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Loan woes
WEB EXCLUSIVE: One Orange County expert says credit is tight, but there may be hope.
By Mary KoserasPublished: October 01, 2008
With the near collapse of Fannie Mae and Freddie Mac, two of the largest mortgage finance lenders, and more than a handful of banks going belly-up, the question on the tip of everyone’s tongue is, “How is this going to affect me?”
Most recently, Wachovia and Washington Mutual were taken over by the FDIC and then sold to Citigroup Inc. and JPMorgan Chase, respectively. Prior to this failure, there were hopes by some experts – including Dean Anil Puri from the Steven G. Mihaylo College of Business and Economics at Cal State Fullerton – that the market would settle down and money flow would increase. But the financial crisis continues, and credit may be tough to come by.
“The housing-mortgage situation in Orange County is going to be tight, regardless (of the recent bank failures),” says Puri. “The fact that they went under is a signal to the mortgage companies that credit is going to be tight, and I expect it will be it’s tightest over the next couple of months.”
However, the Federal Housing Administration (FHA) is offering larger loans for people interested in buying a home. President George Bush recently approved an increase in the maximum loan amount provided by the FHA from $362,790 to anywhere between $271,050 and $729,750, depending on where the home is located. And that’s good news for Orange County, because the maximum loan amount prior to this revision was only about half of the average cost of a home. Now, residents can receive a loan large enough to mortgage a house through the FHA.
Click here to see the five reasons why now is the time to buy a new home.
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Most recently, Wachovia and Washington Mutual were taken over by the FDIC and then sold to Citigroup Inc. and JPMorgan Chase, respectively. Prior to this failure, there were hopes by some experts – including Dean Anil Puri from the Steven G. Mihaylo College of Business and Economics at Cal State Fullerton – that the market would settle down and money flow would increase. But the financial crisis continues, and credit may be tough to come by. “The housing-mortgage situation in Orange County is going to be tight, regardless (of the recent bank failures),” says Puri. “The fact that they went under is a signal to the mortgage companies that credit is going to be tight, and I expect it will be it’s tightest over the next couple of months.” However, the Federal Housing Administration (FHA) is offering larger loans for people interested in buying a home. President George Bush recently approved an increase in the maximum loan amount provided by the FHA from $362,790 to anywhere between $271,050 and $729,750, depending on where the home is located. And that’s good news for Orange County, because the maximum loan amount prior to this revision was only about half of the average cost of a home. Now, residents can receive a loan large enough to mortgage a house through the FHA. Click here to see the five reasons why now is the time to buy a new home. |
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