NAR Objects to DeMarco’s Rumored Loan Limit ChangesSeptember 20, 2013
The National Association of Realtors® (NAR) sent a strongly worded letter to Edward J. DeMarco, Acting Director of the Federal Housing Finance Agency yesterday, directed at several issues impacting the cost and potential availability of credit. A particular target of the letter is DeMarco’s rumored intentions to lower loan limits for Fannie Mae and Freddie Mac (GSE) loans. Gary Thomas, NAR president said the letter was intended “to raise concerns about continued attempts to increase the cost and reduce access to conventional mortgages for an ever increasing amount of borrowers.” He specifically alluded to a September 8 article in the Wall Street Journal which stated that DeMarco would reduce the conforming loan limit, currently set at $417,000, notwithstanding the statutory prohibitions against such a change.
Thomas noted that DeMarco had not yet made public any legal theory for overriding the statutory prohibition but doubted that he had the authority. Congress sets the loan limits and adjusts them annually and after an effort by the FHFA predecessor agency OFHEO to unilaterally reduce limits in 2007 Congress made its policy against such reductions permanent in the Housing and Economic Recovery Act of 2008 (HERA).