63 House Members (And Counting) To Ask FHFA for Delay in Lowering the GSE Loan Limit

From:  Inside Mortgage Finance IMFNews 

Monday, Oct 7, 2013


By Paul Muolo
pmuolo@imfpubs.com

Roughly 63 members of the House of Representatives have signed on to a new letter that will formally ask the Federal Housing Finance Agency to delay any reduction in the Fannie Mae/Freddie Mac loan limit, Inside Mortgage Finance has learned.

Industry advisors and lobbyists are hoping they can move the implementation date for lower loan limits deep into the second quarter of 2014, but they also realize they cannot forestall it completely. Some type of announcement on the issue is expected out of FHFA by mid-month.

On Friday, as reported by Inside Mortgage Finance, the Mortgage Bankers Association officially asked the FHFA to delay a reduction in the GSE loan limit, saying “Now is not the appropriate time to move the limits down.”

In a letter sent late Friday to Acting Director Edward DeMarco, MBA President and CEO David Stevens cites implementation issues tied to new rules from the Consumer Financial Protection Bureau, which become operative early next year. Stevens tells DeMarco that “many changes from the Dodd-Frank Act will go into effect, including the ability-to-repay and Qualified Mortgage requirements, which virtually all observers recognize will tighten credit standards further and reduce availability.”

As for the letter from the 63 members, the correspondence has yet to be sent but will be soon, sources said. “More members may sign onto this,” said one observer. For more updates on the issue, see Inside Mortgage Finance and Inside The GSEs later in the week.