Conservative Organizations Take on Fannie Mae and Freddie Mac
We know it’s not the most glamorous sounding government intrusion, but it is important.
On October 1, the conforming loan limit levels for Fannie Mae, Freddie Mac, and the Federal Housing Authority fell – as scheduled – to $625,000, down from $729,750. This means that the government-sponsored enterprises (GSEs) will be able to provide loans for homes worth up to $729,750. This drowns out private capital for privately-backed mortgages and puts taxpayers on the hook for any defaults. In a recent coalition letter opposing this limit, several conservative organizations, including Heritage Action, explained the situation like this:
“Officials on both sides of the aisle agree that the GSEs cannot continue in their current form. Currently they enjoy funding advantages and explicit government backing that crowd out private capital from the housing markets. However, if the conforming loan limit is gradually reduced, the government’s dominance will cover ever-smaller segments of the market and the healthy, privately-funded ‘jumbo’ market for loans above the limit can expand to fill the void. Data shows that private capital has already rushed in to the segment no longer covered by the GSEs. Reinstating the elevated limits merely sets back this progress and gives ground on an approach to winding down government housing support that even the White House has agreed is best.”
Earlier this week, Heritage Action’s Communications Director, Dan Holler, wrote an article for Townhall about this very issue, saying:
“It is this corrupt nexus between the Washington Establishment and big special interests that have led Americans to vote for change in each of the last three election cycles. They correctly believed Washington was broken, and the deck was stacked in favor of the big, powerful, well-connected special interests. Inserting a provision into a bill behind closed doors without public vetting at the behest of Big Housing is exactly the sort of behavior Americans voted against in 2006, 2008 and 2010.”
Heritage Action has been leading on this effort for several weeks now. We key voted against the Menendez-Isakson amendment, which restored the higher loan limits, and we continue to oppose the higher limits which exert more government control over the free market.
Thank you fellow conservatives for everything you are doing!