NAHB, FSR Put Aside Differences on GSE Reform

The National Association of Home Builders and the Financial Services Roundtable have decided to put aside their differences and work toward the quick passage of a GSE reform bill that temporarily increases the conforming loan limit for Fannie Mae and Freddie Mac. The two trade groups have battled over legislation to strengthen regulatory oversight of the government-sponsored enterprises for many years. But now the two antagonists have agreed to support a House-passed GSE bill in an effort to bring liquidity to the jumbo market and complete action on comprehensive GSE reform. The House bill has a provision that increases the conforming loan limit from $417,000 to $625,000 in high cost areas and allows the GSEs to securitize those higher balance mortgages. Under the compromise, the increase would expire in two years "if the jumbo market returns to a normal spread between conforming and nonconforming mortgage rates." NAHB and the FSR Housing Policy Council executives also pledged to work with other banking and housing groups to get them on board. "We also hope the [Bush] administration will embrace this," NAHB executive vice president Jerry Howard said.