House approves raising loan limits for high housing cost areas

They want Fannie and Freddie to have more leverage.The Boston Herald reports:

Congressmen Barney Frank and Stephen F. Lynch announced the House of Representatives passed legislation increasing the loan limits of Fannie Mae and Freddie Mac for high cost areas such as Massachusetts.
The vote is a victory for middle class people who wish to become homeowners, but who live and work in areas where housing costs have outpaced the national average.
The bill passed by the House yesterday would increase the loan limits up to the local area median home prices, to a maximum ceiling of $539,475. Currently, Fannie Mae and Freddie Mac can only back or purchase mortgages up to $359,650, however, as many in Boston and other high cost areas of Massachusetts already know, home values and mortgages are significantly above that figure.


It is estimated that the new loan limits would help nearly 250,000 first-time homeowners nationwide.

After Fannie's shifty accounting you'd think they'd be in a little trouble.But,heh when you have Congress bought off anything is possible.We wonder if Congressman Frank ever thought of the idea of a world without Fannie and Freddie where housing prices are closer to building costs because artificial leverage wouldn't exist from quasi-fascist institutions ?