NAMB supports stimulus packageMortgagePress.comfinancial crisis, FHA, Freddie Mac, Fannie Mae
Urges Congress to go further to help
homeowners
The National Association of Mortgage
Brokers issued a statement supporting the bipartisan stimulus
package proposed by the White House and leaders of the House of
Representatives that will ease the escalating financial crisis by
increasing the dollar limit for residential loans insured by the
Federal Housing Administration (FHA) and purchased by Fannie Mae or Freddie Mac. The package
passed the House in late January.
"Raising the loan limits up to nearly $730,000 will have an
immediate and powerful impact on families across America,
particularly in high-cost areas," said NAMB President George
Hanzimanolis, CRMS. "We commend Rep. Gary Miller (R-CA) and
Chairman Barney Frank's (D-MA) leadership on this issue, and we
urge the Senate to take swift action on their stimulus package and
include similar language."
The proposal suggests that Congress should:
•Create a Federal Homeownership Preservation Corporation
(FHPC), with an initial capitalization of $10 billion to $20
billion, to purchase outstanding mortgages at steep discounts. In
return, the FHPC would offer at-risk homeowners 30-year, fixed-rate
mortgages insured by the Federal Housing Administration (FHA) or
backed by housing government-sponsored entities (GSEs);
•Provide $10 billion in funding for a Community Development
Block Grant program to allow local governments to buy foreclosed
homes, rehabilitate them, resell them to homeowners, use them for
rental housing, or demolish them and use the land for future
development;
•Revitalize the FHA through the FHA Modernization Act;
and
•Temporarily raise conforming loan limits to bring liquidity
back to the market.
"The stimulus package we are considering recognizes the basic
economic reality that getting money back in the hands of the people
who earned it is the best way to help our economy," said House
Committee of Financial Services Ranking Member Rep. Spencer
Bachus.
Raising the loan limits for Fannie Mae and Freddie Mac could
generate 300,000 additional home sales, reduce the inventory of
unsold homes, strengthen home prices and help 210,000 families
avoid foreclosure, according to the National Association of
Realtors.
In its statement, NAMB said the current situation underscores
the need for GSE reform, and called on Congress to take up
comprehensive GSE reform as quickly as possible, beyond the
confines of the economic stimulus package.
NAMB said increased FHA loan limits were also long overdue, and
urged Congress to further assist families by making the increase
permanent rather than temporary. The statement also called on
policymakers to make it easier for consumers to apply for FHA loans
through Mortgage Brokers.
NAMB has been working to make it more affordable for small
business Mortgage Brokers to offer FHA loans. Right now, unlike
other government loan programs, a costly yearly audit is required
for loan originators to participate in the FHA program. NAMB has
been seeking to replace the yearly audit with a surety bond.
"Experience shows that yearly audit is no guarantee of financial
stability," Hanzimanolis said. "Adoption of a surety bond
requirement for Mortgage Brokers will allow many more small
business Mortgage Brokers operating in rural, low- and
middle-income communities to offer FHA loans where they will have
the greatest impact."
For more information, visit www.namb.org.
