Mortgage Limits

On Thursday November 17th, the House voted 292-121 to restore the elevated conforming limits for FHA jumbo mortgages (but not those guaranteed by Fannie Mae and Freddie Mac) through 2013.  The Senate is expected to give a final vote over the coming days.

The limits were raised in 2008 and expired on October 1st, reverting back to $625,500 from $728,750 in the more expensive neighborhoods.

FHA Acting Commissioner Carole Galante, in an appearance before the Senate Banking Committee on Thursday, effectively indicated that the Obama Administration felt the loan limits need to expire as a first step for private capital to   return to the marketplace.

During her appearance, Galante said: “We understand the FHA is playing a somewhat outsized role and we continue to support the limits being returned Oct. 1. The market is fragile and there are reasonable people who may want to see us stay in the business, and we will implement whatever Congress decides on the matter,” Galante said. “Our traditional mission is to help first-time low- and moderate-income borrowers, and that continues to be the core of our mission. When the loans were higher, it was a very, very small percentage of the work FHA does.”

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