When I told my buyers last week that Fannie Mae's 2007 Conforming Loan Limit Remains at $417000, they quickly chime in with "How dumb is that?"  As a Santa Cruz County Realtor what do you tell them next week if the buyers come back?

OMG,  The trouble is that $417,000 is the maximum loan amount for a single family residence that Congress will allow Freddie and Fannie to provide, doesn't work in California.  It doesn't help my buyers in the San Lorenzo Valley.  Which is the cheap seats of the real estate theater in my county, I can't believe this.  

This may be fine for some parts of California, it does not provide much help for any home buyers and homeowners in Santa Cruz County where the median price in July was $780,000.  Even if that went down in the next 4 months the conforming limit would still be a joke.  Amazingly, years ago Congress saw fit to raise this conforming limit to $625,500 in the "high-priced" states of Alaska and Hawaii. I will never understood why they didn't include us. Why can't we get the same breaks that Hawaii gets?

The House of Representatives has recently passed a bill raising the limit but the Senate has yet to act. While today's borrowers might still have access to the wide variety of mortgage options that existed prior to this month, there aren't as many viable options to satisfy most of my earnest home buyers or any homeowner (past client) who calls me and wants my advice about refinancing.

I strongly urge the Senate to make this a priority, because we need to help homeowners get access to needed credit.  I sent out an short email to express my thought to Reps. Barney Frank, D-Mass., and Gary Miller, and Sen. Charles Schumer.  I understand they are on my side.  What else can I do?  I do still service the high-end $2mil +++ stuff http://www.LuxurySantaCruz.com but I can't get my next door neighbors into homes any more.

I am not a lender but don't you think that in general, the more mortgages the two entities can purchase, the more confident lenders can be about making loans?