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DeMarco adamant on reducing Fannie, Freddie loan limits

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Mortgage Professional America | 28 Oct 2013, 09:04 AM Agree 0
The acting head of the Federal Housing Finance Agency continues to insist on lowering maximum mortgage limits for Fannie Mae and Freddie Mac, despite opposition from industry groups and lawmakers.
  • Eric M | | 28 Oct 2013, 12:07 PM Agree 0
    “Congress did not give FHFA the authority to reduce the mortgage limits. In fact, we included language in statute explicitly stating that the mortgage limits could not be reduced,” Rep. Gary G. Miller (R-Calif.), said Oct. 10. Miller was one of 66 House members from both parties who signed a letter to DeMarco warning him to leave the limits alone.
    If this is true, what is all the fuss about? Demarco does not have the power or authority to do it so why is this news?
  • John C Durham | | 28 Oct 2013, 12:13 PM Agree 0
    There is no difference between what this guy is saying than what the Republican, Tea Party, Democratic Party is saying. Individual members of those parties who fight against this ocean of support for giving the country over to the 1% are few and far between.

    But, they ARE there. And, of course, if the 99% can't outvote the 1% there is only ONE explanation: Elections can be and are being BOUGHT.
  • | | 28 Oct 2013, 12:52 PM Agree 0
    Our nation's economy is so messed up, serious disruptions, serious changes are needed. Trouble is the folks on the gravy train don't want to give anything up...2 much government, too many government employees and the inverse relationship of our elected officials doing whatever they please to hide the truth from us and get huge salaries for life.

    The fact that one sector of this chaos recognizes a way to regain control is encouraging. The problem was home buyers and homeowners looking to refinance were given way too much opportunity.

    No skin in the game? Then wait until you can play. Simple
  • H.G. Rudh | | 28 Oct 2013, 01:12 PM Agree 0
    Sad but true. The "change" that was voted for by many is now back-fireing not only in their face but hurting millions of others as well. Unfortunatly there is no end in sight that is favorable to the citizens of this country or our friends around the world. Pray for God's help.
  • Ralph R. Reitan | | 28 Oct 2013, 01:20 PM Agree 0
    Ed DeMarco HAS NO CLUE: why Fannie Mae and Freddie Mac were created: The role of Fannie Mae in 1938 in pulling the US out of the Great Depression, The role the GSEs have played in keeping banks liquid and competitive, evenning the playing field over the last 75 years serving to give consumers more and less expensive options while providing the liquidity to allow the US to find its way out of recessions instead of depressions. If Ed is left to his own de(vices) it will be 5-6 major banks doing mortgages of their favorite variety at their preferred rates and fees and they will set the rules of who is or isn't qualified (regardless of QM) leaving the Federal gov't prying money out of the tax payers to provide programs/mortgages to low and moderate income consumers that banks will not willingly do. And, all the while, no competition of banking new comers because they will be unable to reliquify (sell into a secondary market) their portfolios to help more consumers in a competitive environment. Unfortunately, there is nothing positive to say about Ed DeMarco's position.
  • Bayview Mortgage Inc. | | 28 Oct 2013, 02:03 PM Agree 0
    If DeMarco were smart. he would just require 35% down on anything above 245,000. Thus mortgage limits are left alone. This would force the banks to offer portfolio products with less down. This should include FHA also. The banks are flush with cash. They need to start using their own cash.
  • Steven Sheasby | | 31 Oct 2013, 12:15 PM Agree 0
    I would appreciate a reduction in FHAs and the GSEs mortgage limits and an increase in interest rates. There is no reason for housing to be so unaffordable. And these high mortgage limits and low interest rates are just making it more unaffordable by causing the prices of homes to go higher and higher.
  • Allen Perry | | 31 Oct 2013, 12:20 PM Agree 0
    I agree with Ralph Reitan's comments that DeMarco clearly does not understand the role of the GSE's. The GSE's are to provide liquidity and reasonable underwriting standards to residential lending. Reducing the lending limits would not be in line with the liquidity role of the GSE's. Likewise further reducing the impact the GSE's have on the market would only benefit the big banks and only reduce competition which is never a good thing to do.
  • Chris | | 31 Oct 2013, 12:56 PM Agree 0
    FHA mortgage limits used to be tied to the median price of housing in the county. Is it any wonder that builders and realtors object to a decrease in mortgage limits? Are they doing much to counter the Dodd - Frank strangehold on lenders?
  • Ted Harris | | 31 Oct 2013, 01:17 PM Agree 0
    The markets in different parts of the nation are not all equal. When you start making adjustments that effect the whole monetary system because there are some sectors that are thriving then those segments that are still trying to recover lose what ever momentum they may have developed.
    I say just leave things as they are and let the market take care of itself. When government begins poking around then trouble begins.
  • George McGuire | | 31 Oct 2013, 01:36 PM Agree 0
    What does Mr. DeMarco have to say about the recent record profits from Freddie Mac and Fannie Mae? Can he not see that allowing them to perform the function Congress had in mind when the GSEs were created is integral to the overall economic recovery. Maybe when our fragile economy has solidified, Freddie and Fannie can be altered liquidated or whatever, but now is the exact worse timing for such moves. Apparently his very narrow focus and unique opinion needs to be replaced quickly.
  • JO | | 01 Nov 2013, 12:45 PM Agree 0
    DeMarco is basing this decision on pure speculation about the future role of the GSEs. He clearly doesn't have the authority to change the GSEs himself. It's irresponsible of him to unilaterally affect the nation's housing market simply because he believes some, yet to be specified, change will happen. Even if that change comes, neither he nor anyone else clearly knows what form it will take, so how can he suppose that this reduction will make that change more effective? If this is being pushed on him from higher ups, he needs to clarify where it is coming from, but if these are his own words and decisions, he should be removed for clear lack of judgement.
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