Pols, Treasury at Loggerheads Over Loan Limits

Key House leaders and Treasury Department officials may have reached an agreement on GSE portfolios, but they are still at loggerheads over increasing the loan limits on Fannie Mae and Freddie Mac.The two government-sponsored enterprises currently cannot purchase loans with a principal balance greater than $417,000. Rep. Barney Frank, D-Mass., who will chair the House Financial Services Committee starting in January, wants to raise the limit up to the median house price in high-cost areas so the GSEs can finance homebuyers in Massachusetts and California. But Treasury officials oppose such an increase, and the future chairman is complaining that their intransigence about this provision in the House GSE regulatory reform bill does not make any sense. "There is no rational argument for treating housing prices as one national uniform figure," Rep. Frank told reporters. The Massachusetts congressman also wants to raise Federal Housing Administration loan limits, which could stall passage of an FHA single-family reform bill next bill year.