GSE Limit Called Discriminatory

Homeowners in high-cost areas would save up to $750 million a year in interest if Fannie Mae and Freddie Mac could purchase their loans, according to a new report by the California Association of Mortgage Brokers that calls for the "equitable distribution" of the interest-rate subsidy afforded conventional loans because of the government-sponsored enterprises' government connection."Our association is calling for an end to what we believe is a policy that discriminates against working families based on the community they live in," said CAMB president John Marcell. The group is supporting a section of the House Financial Services Committee-passed GSE reform bill that -- in areas where the median home price exceeds the current conforming loan limit of $359,600 -- would raise the loan limit to the median home price or to 150% of the current limit, whichever is less. There is no similar provision in the measure under consideration in the Senate. The report says nearly a quarter-million more borrowers nationwide could qualify for the median-priced home in their communities if the GSE ceiling were raised. It also says almost 400,000 current owners are paying from $57 to $171 a month more in interest because their jumbo mortgages are priced at 25 to 50 basis points more than conforming loans. "Every taxpayer should have equal access to the government subsidies through Fannie Mae and Freddie Mac," said Michael Faust, chair of the CAMB's Government Affairs Committee.