Ok all you jumbo loan borrowers for luxury homes. Here is the latest from Congress on how they plan to help you out. This aricle was published in the Boston Globe earlier this week.
Expressing dissatisfaction with the mortgage industry’s response to congressional efforts to prop up the jumbo home loan market, Rep. Barney Frank (D-Mass.) said he will convene a meeting in late May with mortgage bankers, Fannie Mae, Freddie Mac, and Wall Street interests.
As chairman of the House Financial Services Committee, he said he will try to determine why jumbo loans remain elusive and continue to bear steep borrowing costs despite temporary new rules put in place on April 1 that allow Fannie Mae and Freddie Mac to purchase or guarantee mortgages for more than $417,000.
“We fought very hard to raise the loan limits for Fannie and Freddie, and there have been a lot of problems in implementation,” Frank remarked. “There is a chain of people blaming each other, and we’re going to call everybody in there into the hearing and find out why.”
Mortgage Bankers Association chief economist Jay Brinkmann responded that Wall Street investors have balked at investing in jumbo loans under the new higher ceiling until the market determines appropriate pricing on such securities and evaluates their risks. “You don’t want to guess on the low side,” he warned. “If you make a mistake in this environment, you can take a serious price hit.”