Analysts advise Congress to reconsider mortgage support drop

TRD MIAMI /
Sep.September 15, 2011 12:49 PM

Housing experts including Mark Zandi, chief economist at Moody’s Analytics, cautioned legislators yesterday that the size of mortgages backed by the government should not be reduced in October as a result of the fragility of the market, the Wall Street Journal reported.

If Congress doesn’t change course soon, they said, the maximum size of loans that can be guaranteed by Fannie Mae, Freddie Mac and the Federal Housing Administration will be reduced Oct. 1 to $625,500 from the current $729,750 in markets such as New York, Los Angeles and Washington D.C.

Many Democrats are eager for the change to be blocked but the majority of Republicans view permitting the drop as a way to reduce the U.S. mortgage market’s dependence on government.

Zandi had supported dropping the limits earlier in the year. But now, he said, “given what’s happening in the housing market and the economy, I think that’s an error.”

A large number of banks have got a jump start and are already pricing in the lower limits, the Journal said. Mortgage Bankers Association data shows that applications for mortgages between $625,500 and $729,750 fell 34 percent in August. [WSJ]


Related Articles

arrow_forward_ios
Daily Digest Miami

Related is heading to the river, Soffer eyes Fontainebleau Miami Beach expansion: Daily digest

Related is heading to the river, Soffer eyes Fontainebleau Miami Beach expansion: Daily digest
Fannie Mae CEO Hugh R. Frater, and Freddie Mac CEO Donald H. Layton

Fannie Mae and Freddie Mac financing riskier mortgages to indebted homeowners

Fannie Mae and Freddie Mac financing riskier mortgages to indebted homeowners
Home buyers in front of a house (Credit: iStock)

Lenders opening doors to a wider swath of home buyers

Lenders opening doors to a wider swath of home buyers
Brickell Flatiron scores Fannie Mae approval and lowers deposits

Brickell Flatiron scores Fannie Mae approval and lowers deposits

Brickell Flatiron scores Fannie Mae approval and lowers deposits
Mortgage giant Freddie Mac names new CEO amid privatization talks

Mortgage giant Freddie Mac names new CEO amid privatization talks

Mortgage giant Freddie Mac names new CEO amid privatization talks
Buying a home just got easier for many in the gig economy

Buying a home just got easier for many in the gig economy

Buying a home just got easier for many in the gig economy
Private investors are buying more mortgage loans and reselling them as bonds

Private investors are buying more mortgage loans and reselling them as bonds

Private investors are buying more mortgage loans and reselling them as bonds
More Americans are paying mortgages on time

More Americans are paying mortgages on time

More Americans are paying mortgages on time
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...