I’m not one to typically get political and all BUT I feel that the following is too important to not put in my 2 cents worth.
On September 30, the cost of a mortgage could rise significantly. If this happens, many buyers run the risk of being priced out of the American Dream of home ownership. Even worse, this could hold back the housing recovery.
Well-qualified buyers don’t need yet another hurdle to access affordable mortgage financing. With that in mind I just sent the following letter to my representative as have many others in my industry. I hope that the readers of this blog will feel moved to take a stand and write their congressman/woman. If you would like a copy of the letter below please let me know and I’ll get it to you in a format that you can easily forward along to your representative.
Dear Eleanor Norton,
As your constituent, and a REALTOR®, I urge you to act now to make the current loan limits for FHA, Freddie Mac and Fannie Mae (the government sponsored enterprises, or GSEs) permanent. On October 1, 2011, the mortgage loan limits for FHA and the GSEs will decrease, lessening the availability of mortgage credit for hundreds of thousands of responsible and credit-worthy American families. What we need now is time for the real estate market and overall economy to heal, to self-correct, and stabilize. Reducing mortgage liquidity at this time will hurt our fragile economic recovery. H.R. 1754 has been introduced in the House by Reps. Miller (R-CA) and Sherman (D-CA) to make the current limits permanent. No similar bill has yet been introduced in the Senate.
In today’s real estate market, lowering the loan limits will make mortgages more expensive for households nationwide. Private investors have not yet returned to housing markets, and FHA and GSE mortgages together continue to constitute the vast majority of home financing available today, which makes it particularly critical to extend the current limits. Lowering the loan limits now will leave credit-worthy borrowers without access to affordable financing and will prolong our housing crisis.
Although many believe that lower rates will only affect a few high-cost markets. the new limits, published by HUD and the Federal Housing Finance Agency (FHFA), show that more than 669 counties in 42 states and the territories would be negatively impacted by the loan limit change. The average decline in loan limits would be more than $68,000. Only eight states will see no decline. Every other state will see a drop in loan limits, and therefore a corresponding drop in the availability and affordability of mortgage credit. I urge you to pass legislation, like H.R. 1754 in the House, to make the current limits for FHA and the GSEs permanent, and preserve housing opportunities for American families.
Sincerely,
Eldad Moraru
