MBA Reverses Course on Loan Limits

The Mortgage Bankers Association has changed course and is now backing stand-alone legislation that would allow Fannie Mae and Freddie Mae to purchase jumbo loans of up to $625,000 nationwide on a temporary basis.In a letter to the GSEs' regulator, the MBA contends that liquidity problems in the jumbo market have led to higher interest rates on loans above the conforming loans limit ($417,000) and fewer financing options for borrowers. "The increase should be in effect for no less than 12 months, and up to 24 months if market conditions warrant," the MBA says in a letter to James Lockhart, director of the Office of Federal Housing Enterprise Oversight. The MBA previously opposed a temporary hike in the conforming lending limit unless it was part of a comprehensive bill to strengthen the regulation and supervision of the government-sponsored enterprises. The association can be found online at http://www.mortgagebankers.org.