RISMEDIA, Jan. 18, 2008-The National Association of Home Builders (NAHB) and Housing Policy Council (HPC) of The Financial Services Roundtable joined forces today in taking a leadership role to break the deadlock in Congress over regulatory oversight reform of the housing government sponsored enterprises (GSEs) Fannie Mae and Freddie Mac.
“Because we are seeing continued liquidity problems in the jumbo mortgage market, NAHB and HPC support a temporary increase in the conforming loan limit to allow Fannie Mae and Freddie Mac to purchase mortgages in high-cost areas as part of prompt action on GSE reform legislation,” the two groups said.
Specifically, NAHB and HPC are calling on the Senate to swiftly approve legislation similar to House-passed legislation H.R. 1427, which would reform the oversight of Fannie Mae and Freddie Mac and allow them to increase liquidity in the nation’s mortgage markets.
While H.R. 1427 includes a provision calling for a permanent adjustment for high-cost loan areas based on the area median home sales price up to 150% of the national limit, NAHB and HPC believe that the increase should be temporary for two years. At the end of two years, the increase would be terminated if the jumbo market returns to a normal spread between conforming and non-conforming mortgage rates.
“With the potential for an economic recession increasing, now is the time for all of us to put aside our parochial interests and focus on the job of stabilizing the housing market and getting the economy back on track,” said NAHB President Brian Catalde, a home builder from El Segundo, Calif. “The Housing Policy Council and NAHB are committed to doing just that by working with other industry stakeholders, the administration and the Senate to move GSE reform now and get the job done.”
“Fannie Mae, Freddie Mac and the Federal Home Loan Banks play an important role in the mortgage finance system, assisting in maintaining the mortgage market’s stability and promoting affordable housing,” said John H. Dalton, president of the Housing Policy Council. “Therefore it is crucial that Congress complete action on comprehensive legislation to strengthen oversight of these vital GSEs.”
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