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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.