Bill Would Hike Loan Limit in High-Cost Areas

The House GSE bill would raise the conforming loan limit in seven high-cost metropolitan areas, but not in Massachusetts, the home state of the bill’s chief architect and sponsor, Rep. Barney Frank.The House Financial Services Committee chairman's bill would allow Fannie and Freddie to purchase loans in four metropolitan statistical areas in California and multistate areas surrounding New York and Washington where the median sales price exceeds the conforming-loan limit. However, the median sales price in the Boston-Cambridge-Quincy MSA was $406,000 in the fourth quarter, according to National Association of Realtors data, slightly below the current $417,000 conforming-loan limit. The government-sponsored enterprise reform bill (H.R. 1427) caps the loan limit in high-cost areas at 150% of the conforming-loan limit. The Realtors support "regional adjustments to the conforming loan," NAR president Thomas Stevens told committee members at a March 12 hearing. But the Mortgage Bankers Association and America's Community Bankers oppose an increase. "Jumbo loan borrowers are well served by the private sector," MBA chairman John Robbins testified.