| Fannie Mae/Freddie Mac: Fannie Mae and Freddie Mac (the GSEs) remain critical to ensuring mortgage market liquidity. On September 7, 2008, the Federal Housing Finance Agency (FHFA) placed Fannie Mae and Freddie Mac into conservatorship. FHFA took this action "to help restor confidence in Fannie Mae and Freddie Mac, enhance their capacity to fulfill their [housing] mission, and mitigate the systemic risk that has contributed directly to the instability in the current market." At this point, it was expected that the debate on the future structure of Fannie Mae and Freddie Mac would begin in earnest. However, with Congress's attention focused elsewhere, legislation is not expected to be enacted until 2011 at the earliest. Despite higher limits being extended through year-end 2010, their temporary nature continues to make lenders and investors wary of supporting them. Making the limits permanent at levels approriate in all parts of the country will proved homeowners and homebuyers with safe, affordable financing and help stabilize local housing markets. Currently, the higher GSE limits are set to expire on December 31, 2010 Higher loan limits need to be permanent and available in all markets. Congress needs to enact legislation to restructure Fannie Mae and Freddie Mac in a manner that provides the federal government with a continued role in the secondary market in order to ensure mortgage liquidity in all markets. Congress also needs to enact legislation that makes permanent the higher GSE loan limit formula and caps in order to provide affordable financing for all borrowers in all markets. |