The commercial real estate market is the “one domestic factor that keeps me up at night,” Federal Reserve Bank of Atlanta President Dennis Lockhart told the Association for Financial Professionals meeting Monday in Orlando.
Lockhart told the group that $400 billion of commercial real estate refinancing was hanging over the market and could slow the country’s economic recovery, which he expects to be clearly underway in the second half of 2009.
He also said he believed many of the predictions for the timing of the end of this downturn to be too pessimistic. “Economic forecasts will tend to be overly optimistic as the economy goes into a recession, but overly pessimistic as the economy comes out of recession and begins its expansion phase. Perhaps, we should take some comfort from that,” he said.
Source: Reuters News, Alister Bull
Earlier today President Bush signed into law a number of very significant changes that will occur starting October 1st. Please read these changes as they affect all of us and our Home buying abilities.
Details of the Housing and Economic Recovery Act are as follows:
The two items in bold will have the greatest immediate impact so please read these carefully.
Higher permanent loan limits for conventional conforming and FHA loans will become EFFECTIVE January 1, 2009. The act calls for limits to increase to a maximum amount of 625,500 , depending on the metropolitan area. The temporary limits established in March 2008 are set to expire December 31, 2008
-FHA floor limit to remain at 271, 500
-VA guaranty will increase
**Minimum cash investment for FHA loans WILL increase to 3.5%**
-A moratorium on RISK Based Pricing for FHA loans will go into effect on October 1, 2008
**Seller Funded Down Payment Assistance with FHA loans will be TERMINATED on October 1, 2008. No more DPAs like Nehemiah & American Dream.**
-Condo processing for FHA loans will be streamlined