By Corbett B. Daly
WASHINGTON, Sept 24 (Reuters) - Democratic leaders in the U.S. Congress plan to extend next week increased loan limits on mortgages backed by Fannie Mae and Freddie Mac , which are set to expire at year end, Democratic aides said on Friday.
Congress raised the ceiling on the size of the loans the two mortgage finance companies can back in 2008 to help ease the credit crisis. Analysts warn the distressed housing market would take a fresh hit if they are not extended. They are currently due to expire at the end of the year.
The House of Representatives voted in late July to extend them through September 2011 as part of an annual spending bill for the Department of Housing and Urban Development.
The Senate, however, has not passed its version of the bill and time is running out before lawmakers leave Washington to hit the campaign trail before congressional elections on Nov. 2.
Senate Democratic aides told Reuters that Senate Democrats plan to add a temporary extension of the loan limits to a separate stop-gap spending bill that is required to keep the government running. A vote on that bill, which must be passed before the fiscal year ends Sept. 30, could come as early as Tuesday.
The House would also have to pass an identical version of the Senate measure, known as a 'continuing resolution,' before President Barack Obama could sign it into law.
Senators 'are going to have to figure out what is possible and the House will deal with it,' a House Democratic aide said, referring to the shape and scope of the overall stop-gap measure.
The higher limits, which vary by region, top out at $729,750 for single-family homes in the most expensive parts of the country, except for Alaska and Hawaii, which have higher limits. Previously the high-cost area cap was $625,500.
'This is positive for home builders and mortgage lenders that are exposed to higher cost markets on the East and West coasts,' said Jaret Seiberg, an analyst at Concept Capital in Washington.
Federal Housing Administration Commissioner David Stevens earlier this week urged lawmakers to extend the temporary loan limits beyond the December deadline.
Loans backed by the FHA, which does not make loans directly but guarantees them for borrowers who meet certain restrictions, would also have the higher limits extended for a year.
The private market for so-called jumbo loans has all but dried up in the wake of the 2007-2009 financial crisis. More than 80 percent of all new mortgages are now directly or indirectly supported by the government.
Separately, House Financial Services Committee Chairman Barney Frank on Friday admonished Fannie Mae Chief Executive Michael Williams and Fannie Mae regulator Edward DeMarco for hiring lawyers 'accused of regularly engaging in fraud to kick people out of their homes.'
'Given Fannie Mae is at this point a government entity, and it is the policy of the government that foreclosures are a costly situation best avoided if there are any lower cost alternatives, what steps is Fannie Mae taking to avoid the use of foreclosure mills,' Frank and two other lawmakers wrote to Williams in a letter dated Friday and released to reporters.
Florida Attorney General Bill McCollum earlier this month launched investigations into three Florida law firms for 'unfair and deceptive' practices and using 'improper documentation' to speed up the foreclosure process 'potentially without the knowledge or consent of the homeowners involved.'
(Reporting by Corbett B. Daly; Additional reporting by Kevin Drawbaugh; Editing by Kenneth Barry) Keywords: USA HOUSING/CONGRESS (corbett.daly@thomsonreuters.com; +1-202-898-8442; Reuters Messaging: corbett.daly.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
WASHINGTON, Sept 24 (Reuters) - Democratic leaders in the U.S. Congress plan to extend next week increased loan limits on mortgages backed by Fannie Mae and Freddie Mac , which are set to expire at year end, Democratic aides said on Friday.
Congress raised the ceiling on the size of the loans the two mortgage finance companies can back in 2008 to help ease the credit crisis. Analysts warn the distressed housing market would take a fresh hit if they are not extended. They are currently due to expire at the end of the year.
The House of Representatives voted in late July to extend them through September 2011 as part of an annual spending bill for the Department of Housing and Urban Development.
The Senate, however, has not passed its version of the bill and time is running out before lawmakers leave Washington to hit the campaign trail before congressional elections on Nov. 2.
Senate Democratic aides told Reuters that Senate Democrats plan to add a temporary extension of the loan limits to a separate stop-gap spending bill that is required to keep the government running. A vote on that bill, which must be passed before the fiscal year ends Sept. 30, could come as early as Tuesday.
The House would also have to pass an identical version of the Senate measure, known as a 'continuing resolution,' before President Barack Obama could sign it into law.
Senators 'are going to have to figure out what is possible and the House will deal with it,' a House Democratic aide said, referring to the shape and scope of the overall stop-gap measure.
The higher limits, which vary by region, top out at $729,750 for single-family homes in the most expensive parts of the country, except for Alaska and Hawaii, which have higher limits. Previously the high-cost area cap was $625,500.
'This is positive for home builders and mortgage lenders that are exposed to higher cost markets on the East and West coasts,' said Jaret Seiberg, an analyst at Concept Capital in Washington.
Federal Housing Administration Commissioner David Stevens earlier this week urged lawmakers to extend the temporary loan limits beyond the December deadline.
Loans backed by the FHA, which does not make loans directly but guarantees them for borrowers who meet certain restrictions, would also have the higher limits extended for a year.
The private market for so-called jumbo loans has all but dried up in the wake of the 2007-2009 financial crisis. More than 80 percent of all new mortgages are now directly or indirectly supported by the government.
Separately, House Financial Services Committee Chairman Barney Frank on Friday admonished Fannie Mae Chief Executive Michael Williams and Fannie Mae regulator Edward DeMarco for hiring lawyers 'accused of regularly engaging in fraud to kick people out of their homes.'
'Given Fannie Mae is at this point a government entity, and it is the policy of the government that foreclosures are a costly situation best avoided if there are any lower cost alternatives, what steps is Fannie Mae taking to avoid the use of foreclosure mills,' Frank and two other lawmakers wrote to Williams in a letter dated Friday and released to reporters.
Florida Attorney General Bill McCollum earlier this month launched investigations into three Florida law firms for 'unfair and deceptive' practices and using 'improper documentation' to speed up the foreclosure process 'potentially without the knowledge or consent of the homeowners involved.'
(Reporting by Corbett B. Daly; Additional reporting by Kevin Drawbaugh; Editing by Kenneth Barry) Keywords: USA HOUSING/CONGRESS (corbett.daly@thomsonreuters.com; +1-202-898-8442; Reuters Messaging: corbett.daly.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.