NAR, Other Groups Call for Loan-Limit Extension

August 2, 2011

The National Association of REALTORS®, along with 15 other organizations, have signed onto a letter that calls on lawmakers to immediately grant a one-year extension of the current mortgage loan limits. The letter says that such action is critical for preserving home values and not stalling a real estate market recovery.  

“Housing markets remain fragile and cannot handle a mortgage disruption like lower loan limits,” the letter reads.  “With tight underwriting already constraining mortgage availability, lowering the loan limits will only further restrict liquidity.” 

The current mortgage loan limits are set to expire Sept. 30.

Lawmakers have been debating whether to change limits for FHA loans, as well as for Fannie Mae and Freddie Mac’s conventional conforming loans. NAR has estimated that reverting to lower FHA limits on Oct. 1 could impact 669 counties in 42 states as well as the District of Columbia.

In the letter to lawmakers, NAR and the other groups also expressed concern that some major lenders have already stopped accepting mortgage applications at the current limits, fearing the loans won’t close prior to the expiration.

“Extending the current limits at levels appropriate for all parts of the country will provide home owners and home buyers with safe, affordable financing and help stabilize local housing markets,” the letter reads.  

Read the letter in its entirety. 

Source: “NRMLA Co-Signs on Trade Associations’ Request for Loan Limit Extensions,” Reverse Mortgage Daily (July 31, 2011)

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