Home-Loan Reform Hits a Snag

When the House returns from recess next week, lawmakers will have just a matter of days to come to an agreement on federal spending for fiscal year 2012. A continuing resolution passed last month is set to expire on November 18, and there are still a number of highly controversial issues — the amount of “emergency” disaster funding, for example — that must be resolved before the deadline, not least of which is a Senate-passed measure that would raise the limit on the size of mortgages that housing giants Fannie Mae and Freddie Mac are allowed to guarantee. If House Republicans ultimately decide to go along with the provision, they could risk violating their much-heralded “Pledge to America,” the election-year manifesto that helped guide them to victory in 2010.

The measure, which raises the mortgage limit from $625,500 to $729,750, recently passed the Senate by a vote of 60–38. It is nothing new. Rather, the vote was simply to extend an increase first proposed in 2008 as a temporary fix in response to the housing crisis. Since then, however, Congress has voted to extend the “temporary” increase three times, including once as part of the 2009 stimulus package. The most recent extension expired at the end of September.

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