Appropriations Resolution Would Extend Higher Reverse Mortgage Loan Limits

October 28th, 2009 | by John Yedinak Published in FHA, News, Reverse Mortgage | 2 Comments

Update - Higher loan limits passed House and Senate, read here.

Appropriations committees in the House and Senate are proposing to extend temporary higher limits on the size of home mortgages Fannie Mae (FNM) and Freddie Mac (FRE) can buy or guarantee as part of a stopgap funding legislation that could pass Congress as soon as this week said the Wall Street Journal.

According to a continuing resolution summary released earlier this week, the extension includes maintaining the home equity conversion mortgage (HECM) loan limits through the end of calendar year 2010.

“While those loan limits aren’t scheduled to go down to $625,500 until January 1, if not maintained at the higher level now, the mortgage industry will begin to plan for loans at the lower amount,” according to a joint press release by the chairs of the appropriations committees in both houses of Congress, Sen. Daniel Inouye (D-HI) and Rep. David Obey (D-WI).

The legislation, known as a continuing resolution, would fund the federal government through Dec. 18 at 2009 levels, giving lawmakers more time to complete appropriations measures.

The continuing resolution still must pass both the House and Senate.

Technorati Tags: Reverse Mortgage,News,HECM,FHA,HUD

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The_Critic

The summary specifically states:

“Maintaining Housing Loan Limits: The CR maintains loan limits for FHA, GSE and HECM single family mortgages at $729,750 through end of calendar year 2010. While those loan limits aren’t scheduled to go down to $625,500 until January 1, if not maintained at the higher level now, the mortgage industry will begin to plan for loans at the lower amount….”

It is interesting that the authors show how little knowledge they have about lending limits on HECMs. They are under the misunderstanding there our limits are the same as FHA forward mortgages.
Anonymous

The summary specifically states:rnrnu201cMaintaining Housing Loan Limits: The CR maintains loan limits for FHA, GSE and HECM single family mortgages at $729,750 through end of calendar year 2010. While those loan limits arenu2019t scheduled to go down to $625,500 until January 1, if not maintained at the higher level now, the mortgage industry will begin to plan for loans at the lower amountu2026.u201d rnrnIt is interesting that the authors show how little knowledge they have about lending limits on HECMs. They are under the misunderstanding that our limits are the same as FHA forward mortgages, i.e., $729,750.rnrnIf the health care bill will be as poorly managed as it appears it will be, resolution and passage of the appropriations bill impacting HUD may not occur until next year. rnrnThe real question is whether or not an extension of the higher limits until at least 9/30/2010 will result in a higher deficit than $798 million requiring a greater reduction to the principal limit factors of more than 10%. Hopefully, that will not be the case.rnrn

Appropriations Resolution Would Extend Higher Reverse Mortgage Loan Limits

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