RISMEDIA, Feb. 11, 2008-The National Association of Realtors® expressed ongoing support for legislative reform to Fannie Mae and Freddie Mac that would help stabilize the housing market and improve liquidity to the secondary nonconforming market. NAR stressed the importance of permanently increasing the loan limits as part of any reform package; that will help encourage healthier conditions in the housing market and strengthen the national GDP.
In testimony submitted to the U.S. Senate Committee on Banking, Housing and Urban Development, NAR reiterated its position that legislative reform to the government sponsored enterprises (GSEs) should focus principally on regulating safety and soundness and expanding the role Fannie Mae and Freddie Mac play in the secondary mortgage market.
“We are pleased that Chairman Dodd, D-Conn., and Sen. Shelby, D-Ala., agreed to hold a hearing on the important issue of enhancing the GSE regulatory system,” said NAR President Richard Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif.
“Fannie and Freddie are our partners in the housing industry and are important to stabilizing and strengthening the housing market,” Gaylord said. NAR stated that any GSE reform should include establishing a strong regulator and GSE governance; permanently increasing conforming loan limits; reviewing the housing mission; providing flexibility in new program approval and increasing the portfolio caps.
NAR’s research found that simply increasing the loan limits for Fannie Mae and Freddie Mac to $625,000 would permit as many as 300,000 families to enter the housing market, reduce foreclosures by as many as 210,000 and allow as many as 500,000 jumbo loan borrowers to refinance to lower cost loans, saving these people $274 to $411 a month.
“I can think of no other reform that could have such a quick and profound impact on the housing industry and our national economy. NAR urges the Senate to work quickly to pass full GSE reform,” said Gaylord.
For more information, visit www.Realtor.org.