Mortgage Bankers Association President David Stevens switched positions today, advocating for a continuation of higher federal loan limits for another year, CNBC reported.
Earlier this month, the federal government laid out plans to slowly pull out of the mortgage market, by lowering the maximum loan that Fannie Mae, Freddie Mac and the FHA can issue. During the downturn the limit was lifted to $729,750 so that residents of the country’s most expensive housing markets, including New York, could continue to obtain financing even as private lenders were skittish. The government plans on decreasing the maximum to $625,500 Oct. 1.
While the MBA had backed the government plans, hoping that it would return private capital to the market, Stevens advocated for a continuation of the raised limit today. “The temporary loan limits authorized by Congress have benefited consumers and the housing market during what has been a turbulent period for our nation’s economy,” he said in the statement. “That decline is not over yet.” Though Stevens said he believes the government does have too big a role in the housing market, its withdrawal could prove detrimental. Because lenders remain hesitant, he said, the market still needs that support. However, many bankers have said those concerns are overblown and that they’re ready to expand their jumbo loan business. [CNBC]