Mortgage groups and a bipartisan coalition of lawmakers are making a last-minute push to extend conforming loan limits before they expire at month’s end.
More than a dozen industry groups sent a joint letter this week to the Senate leaders sponsoring a bill that would keep the higher limits in place through 2013. In it, the trade organizations pledged to work with lawmakers but warned that time was short — and that the stakes remain high.
“Any further disruption to the real estate market will stall our recovery,” the letter reads in part. “Extending the existing limits at levels appropriate for all parts of the country will provide homeowners and home buyers with safe, affordable financing and help stabilize local housing markets.”
The bill, the Homeownership Affordability Act of 2011, is sponsored by Sens. Robert Menendez (D-NJ) and Johnny Isakson (R-GA) and co-sponsored by Sen. Diane Feinstein (D-CA).
Earlier this year, the Treasury Department recommended Congress allow the loan limits to return to pre-2008 levels. That year, Congress voted to boost limits to spur economic growth. Without action, the current $729,750 cap would return to $625,000 effective Oct. 1.
Some Congressional lawmakers are also pushing for an extension as the clock runs down. A group of 37 sent a letter to the House Appropriations committee on Thursday advocating for a short-term extension.
At this point, the most likely path for any loan limit extension is through a provision attached to a must-pass government spending bill, lawmakers told MarketWatch.
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