The National Association of Home Builders (NAHB) and the Housing Policy Council (HPC) of The Financial Services Roundtable have joined forces to try to break the deadlock in Congress over regulatory oversight reform of government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac.
NAHB and HPC explain that they 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.
‘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 groups state.
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 nonconforming mortgage rates.