Monday, July 16 , 2018, 2:42 am | Fair 66º

 
 
 

Beware the Fine Print in Conforming Loan Limits Proposal

Washington solution penalizes South Coast homeowners. Ask Congress to change it.

The conforming loan limit change proposed as part of the economic stimulus package President Bush signed has some interesting implications for Santa Barbara County.

If you’ve been following the real estate market here, you know it has been a tale of two different markets. There have been significant drops in prices and a high number of foreclosures in the North County, while prices on the South Coast have been fairly consistent and there have been very few foreclosures comparatively. According to the stimulus package language, conforming loan limits for our area are figured at 125 percent of the median sale price for the county. After the calculation, that figure is $587,500, according to the Santa Barbara Association of Realtors. Other counties, like Ventura, have the benefit of the highest conforming loan limit of $729,500, since their median prices are higher than ours. These limits will only be raised from July 1 to the end of the year to help out the slowdown in the real estate market.

In my opinion, this will put the South Coast at an unfair disadvantage when it comes to the purchasing and refinancing of residential property in our area. One of the reasons we have seen the slowdown that we have is that jumbo loan programs recently have not had any investors wanting to invest in them. This has caused these rates to be significantly higher than the conforming loan rates. If the conforming loan limit for the South Coast were to be raised to the maximum of $729,500, it would certainly help people trying to purchase a home in this area. It would most likely help property owners who want to refinance their existing loans as well.

There is the possibility of having conforming loan limits figured based on ZIP codes, and that is why I’m writing this. The current new estimated amount of $587,500 will have little or no impact on improving the market here on the South Coast. We need your help with the conforming loan limits so they actually can help the people who need it.

Please write our elected officials, Rep. Lois Capps, D-Santa Barbara, and Sens. Barbara Boxer and Dianne Feinstein, D-Calif., to voice your concern and to ask that there be a north/south split in Santa Barbara County’s new and future conforming loan limits. The Santa Barbara Association of Realtors has provided information on its Web site as to what you may want to say and who you may want to contact. You can view it by clicking here.

For more information, visit LandAmerica Lawyers Title Co. by clicking here.

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Greg Knowles
Greg Knowles is vice president county manager of LandAmerica Lawyers Title Co.

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