While many in the reverse mortgage industry are hoping for the higher loan limits to be extended, Department of Housing and Urban Development Secretary Shaun Donovan told Bloomberg Television the limits can return to pre-crisis levels without hurting the housing market.
“We continue to be convinced that this is the right step to take now and that it’s not going to have a major impact on the market going forward,” Donovan said during the interview.
HUD has repeatedly said the future loan limits for the Federal Housing Administration’s reverse mortgagee program are up in the air.
“The loan limits were raised because of the crisis. We have to go back, and we have to get started on that,” Donovan said.
Donovan said the housing crisis is the worst the country has ever seen. He said government efforts to stabilize home prices have helped, but not enough.
Some members of Congress do not agree that the loan limits should be lowered. Earlier this month, Rep. John Campbell (R-Calif.) and Rep. Gary Ackerman (D-N.Y.) introduced a bill to extend the current conforming loan limits for two years.
Barney Frank recently said that he believes the Obama administration will support keeping the loan limits where they’re at now. He also told the WSJ he believes many House Republicans will support doing so, given current housing market concerns.
“I think there’s a very real chance they’ll get extended,” Rep. Frank told the WSJ.