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MBA lauds economic-stimulus passage.

The Mortgage Bankers Association lauded the economic-stimulus package passed by the House and Senate and signed into law by President Bush in mid-February as "an important step" toward helping the economy.

In addition to providing tax rebates of $300 for individual taxpayers and $600 for married taxpayers filing joint returns, the Recovery Rebates and Economic Stimulus for the American People Act (H.R. 5140) allows for temporary increases in the size of loans for purchase by the government-sponsored enterprises (GSEs), as well as for insurance by the Federal Housing Administration (FHA).

The bill, as passed, raises the statutory ceiling on the maximum original principal obligation of a mortgage originated between July 1, 2007, and Dec. 31, 2008, that may be purchased by Fannie Mae or Freddie Mac.

H.R. 5140 will increase caps on mortgages in "high-cost" areas eligible for FHA insurance to 125 percent of the regional median home price, and grant the Department of Housing and Urban Development (HUD) discretionary authority to increase the limit by another $100,000 beyond that.

Furthermore, the bill would increase the GSEs' conforming loan limit to 125 percent of the regional median home price, provided it doesn't exceed 175 percent of the previous limit.

MBA Chairman Kieran P. Quinn, CMB, praised the housing components of the stimulus package as a measure that should provide much-needed liquidity for the mortgage markets, especially in areas with high housing costs.

"The temporary increase in the loan limits for FHA, Fannie Mae and Freddie Mac will help consumers by providing important financing options, and will help restart the securitization market for higher-value loans," said Quinn. "It will be especially important in expensive housing markets like California, and parts of Florida and New York."

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Title Annotation:Briefing Book; Mortgage Bankers Association
Comment:MBA lauds economic-stimulus passage.(Briefing Book)(Mortgage Bankers Association)
Publication:Mortgage Banking
Article Type:Brief article
Geographic Code:1USA
Date:Mar 1, 2008
Words:289
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