Put away the champagne folks - the conforming loan limit increase seems to be in jeopardy.
According to Inman News:
But an increase in the conforming loan limit faces opposition in the Senate, where Sen. Richard Shelby, R-Ala., is sticking with the position previously held by the Bush administration: that any increase in the conforming loan limit should be tied to strengthening oversight of Fannie and Freddie (”the GSEs,” or government-sponsored entities).
A spokesman for Shelby, the ranking Republican on the Senate Banking Committee, said he “believes that consideration of raising the conforming loan limit should be done carefully within the context of broader and meaningful GSE reform.”
In Shelby’s judgment, “doing so in the absence of such a process enables thinly capitalized entities with recent accounting problems to provide a high-risk benefit to the wealthiest Americans without any real consideration of the need to do so or of the risks it presents to the taxpayer,” a spokesman for the senator, Jonathan Graffeo, told Inman News in an e-mail.
I’ll go out on a limb and say that any stimulus package without some shot in the arm to the GSE’s is going to fall terribly flat. After all, how many mortgage payments can you make with an extra $300?
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