Proposed federal legislation strengthening oversight of Fannie Mae and Freddie Mac could reduce mortgage costs for 397,000 U.S. homeowners -- including many in California -- by as much as $750 million a year, the California Assn. of Mortgage Brokers said.
The bill, which passed the House Financial Services Committee by a 65-5 vote in May, would also cut mortgage rates enough to enable about 245,000 households to buy homes at the median price in their communities, the Folsom, Calif.-based association said in a report Monday.
An amendment in the bill would help home buyers in high-cost housing markets by raising the limit on mortgages that Fannie Mae and Freddie Mac would be allowed to purchase to the median home price in those markets from the current maximum of $359,650. The companies have a combined mortgage portfolio of about $1.47 trillion.
"This is a sop to not just parts of the housing industry like Realtors, mortgage bankers, mortgage brokers and home builders, but to Fannie and Freddie," said Bert Ely, a bank and regulation consultant in Alexandria, Va., who runs Ely & Co. and has called for restrictions on the size of Fannie Mae and Freddie Mac. "The amendment increases the amount of mortgages" the two government-chartered companies could buy.