U.S. Rep. Gary Ackerman (D-Bayside) said last week he was leading a bipartisan effort in Congress to stabilize the housing market in Queens and other high-cost areas by raising the limit on mortgages the government is allowed to guarantee.
Ackerman sent a letter signed by 131 members of Congress last month, urging House leaders to reinstate the $725,750 mortgage loan limit that would allow Fannie Mae, Freddie Mac and the Federal Housing Authority to guarantee mortgages in areas deemed to be high-cost, such as New York, Boston, Chicago, southern California and San Francisco, among others.
Congress had raised the limit from $625,000 in 2008 in an attempt to stabilize the housing sector, but that extension expired at the end of September and reverted back to its previous figure. The congressman said many private lenders have been extremely reluctant to make additional mortgage loans in the still sluggish economy.
“Forcing this transition in a weak market, before the private market has shown the willingness to take on additional mortgage risk, is not wise policy during a housing crisis,” said Ackerman, a senior member of the House Financial Services Committee.
“Middle-class homeowners are struggling through the most difficult economic times since the Great Depression. If a large portion of the housing market is forced to fend for itself, the result will be disastrous for homeowners throughout Queens and all across the country,” the congressman said.
In addition, he said the expiration of the higher limits forces homeowners to seek more expensive, privately funded mortgages with higher down payment requirements.
“We should be doing all we can to stimulate the economy and help the housing sector recover rather than socking homeowners with higher interest rates and larger down payments. Making the cost of mortgages more expensive makes zero sense during these fragile economic times and will only slow the economy’s delicate recovery,“ said Ackerman.
Reach reporter Rich Bockmann by e-mail at firstname.lastname@example.org or by phone at 718-260-4574.
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