Four trade groups want the House to strike a provision from the GSE regulatory reform bill that would raise the conforming loan limit in high-cost areas and allow Fannie Mae and Freddie Mac to purchase jumbo loans.The bill would allow the two government-sponsored enterprises to purchase loans of up to $540,000 in high-cost metropolitan areas of California, Massachusetts, New York, Washington, D.C. and Florida. The conforming loan limit is currently $359,650. America's Community Bankers, Association of Financial Guaranty Insurers, Consumer Mortgage Coalition, and the Financial Services Roundtable/Housing Policy Council argue that raising the conforming loan limit would produce little benefit for higher income families since an active secondary market for jumbo loans already exists. However, it would "unnecessarily expand the systemic risks inherent to the operations of the enterprises, and would divert attention and resources from the [GSEs'] mission of servicing low- and moderate-income homebuyers," the trade groups say in the July 1 letter to House members.
