Trade groups to FHFA: No new loan limits
Oct. 9, 2013 – NAFCU, along with trade organizations from the real estate and mortgage lending industries, wrote to the Federal Housing Finance Agency Tuesday urging it to not lower the size of mortgages permitted to be financed by government-sponsored enterprises Fannie Mae and Freddie Mac.
The group of organizations – which also includes the American Escrow Association, the American Land Title Association, Community Mortgage Lenders of America, the Mortgage Bankers Association and the National Association of Realtors – argued that the Housing and Economic Recovery Act of 2008 prohibits loan limits from decreasing below the current level of $417,000.
“Our nation is on the path to recovery. Yet purchasing a home remains a challenge for many potential homeowners due to the restrictive availability of credit,” the letter said. “A reduction of the conventional conforming loan limit to $400,000 would have impacted nearly 154,000 borrowers in 2012, many of whom were in markets still in recovery.”
The organizations also pointed out that changes from the Dodd-Frank Act such as the ability-to-repay rule will go into effect in January, and urged the FHFA to not add to the market turbulence.