The American Homeowners Grassroots Alliance urges OFHEO to increase the limits on the investment portfolios of Fannie Mae and Freddie Mac
|August 16, 2007|
|AHGA Letter to OFHEO [pdf]|
The American Homeowners Grassroots Alliance (AHGA), the consumer advocacy organization serving the nations 75 million homeowners, is urging the Office of Federal Housing Enterprise Oversight Director James Lockhart, III to reconsider his decision not to increase the limits on the investment portfolios of Fannie Mae and Freddie Mac. The Alliance also urged Mr. Lockhart to support accelerated Congressional consideration of other measures that can also add liquidity and stability to the housing and mortgage markets, such as pending proposals to broaden homeowner eligibility for FHA loans.
AHGA is receiving increased numbers of calls from homeowners with excellent credit histories and stable incomes who are either unable to get jumbo financing or can only get it at a rate much higher than the traditional spread between jumbo and confirming loans.
“It is clear that the problem has spread beyond subprime loans”, said AHGA President Bruce N. Hahn. “If something is not done immediately we may soon erase the considerable expansion in home ownership that has occurred in this decade.” he added.
While AHGA appreciates Mr. Lockhart’s significant supervisory concerns regarding the management practices of the GSE’s, many of their internal reforms have already been accomplished and immediate action is needed to add liquidity and stability to the mortgage market.
The stock market has recently fallen by nearly 1,000 points, and most financial analysts believe the disarray in mortgage lending is playing a significant role in that downturn. Home values are continuing to drop in many parts of the country and, combined with the turmoil in the mortgage markets, threaten the ability of responsible homeowners across the nation to remain in their homes.
For these reasons AHGA believes the GSE’s portfolio caps should be increased, and the expanded lending authority should also be targeted to assure that GSEs use the increased capacity to help meet critical credit needs of our nation’s homeowners. These steps are essential in order to prevent further declines in home values and further deterioration in the mortgage marketplace.
AHGA is the national consumer advocacy organization serving the nation’s 75 million homeowners. More information about the organization is at www.AmericanHomeowners.org