REALTORS Urge Increased National Loan Limit as Vital to Housing Market
WASHINGTON, March 06, 2008 – The National Association of Realtors® today called on the U.S. Senate to enact reform legislation for the nation’s government-sponsored enterprises (GSEs) that will protect the vibrancy, liquidity and stability of the U.S. housing finance system.
In testimony before the Senate Committee on Banking, Housing and Urban Affairs, NAR urged the Senate to permanently raise the national GSE conforming loan limits to $625,000 with an additional increase of 125 percent of the local median home-sales price in high-cost areas.
“We believe this move will boost the housing market and the economy by bolstering home buyer confidence and bringing families back into the marketplace,” said Realtor® Vince Malta, chair of NAR’s Public Policy Coordinating Committee and a broker-owner from San Francisco. “That would increase home sales by nearly 350,000, lower inventories and increase home prices by two to three percent. It would also result in as many as 210,000 fewer foreclosures, and more than 500,000 borrowers would be able to refinance into lower interest rate loans.”
NAR reiterated its eagerness for the committee to pursue GSE reform legislation similar to the Federal Housing Finance Reform Act of 2007 passed last year in the House, which, in addition to raising loan limits, would create a strong regulator and sound governance principles, preserve and protect the GSEs vital housing mission, and allow flexibility for new program approval.
“Fannie Mae and Freddie Mac provide liquidly and stability in the mortgage market and are vital to the housing sector,” said Malta. “Targeted reform should strengthen and expand their presence in the housing finance system, especially now when we need them the most. The recent problems in the credit markets show just how vital the GSEs’ housing mission is to America’s families and to our nation. We all must work together to sustain and improve the performance and safety of Fannie Mae and Freddie Mac.”
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.3 million members involved in all aspects of residential and commercial real estate industries.