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Residential Department: From the Editor: April 2008


From the Editor

If you don’t have an opinion about the economic-stimulus bill President Bush signed into law in February, you haven’t been paying attention.

Then again, even if you were, you’d notice that sentiment in the mortgage industry varies considerably.

In the most general sense, the package does include some relief for consumers, according to those such as Mortgage Bankers Association Chairman Kieran P. Quinn.

“This stimulus package will play a key role in stabilizing the housing market and ensuring continued economic growth in this country,” Quinn said in a statement. “The temporary increase in the loan limits for [the Federal Housing Administration], Fannie Mae and Freddie Mac will help consumers by providing important financing options and will help restart the securitization market for higher-value loans.”

Others in the mortgage industry have praised the package for its ultimate intention of helping keep homeowners in their homes. For a handful of consumers, even receiving the rebate check called for in this plan is a plus.

But the “handfuls” approach also is a key complaint from those who’ve found fault with the package. They point out that it:

Mostly will affect homeowners in 20 metropolitan statistical areas;

Pertains only to loans originated between this past July and this coming Dec. 31; and

Calls for these loans to be packaged as mortgage-backed securities with a noted prefix.

This final element, as Wholesale Access Mortgage Research and Consulting Inc.’s David Olson and Tom LaMalfa noted in a message in late February, could be the most troublesome. By and large, investors have little interest in geographically similar loans.

With this in mind, Wholesale Access -- whose new Origination Tracker feature debuts on this page this month -- predicts that Fannie Mae could actually end up raising interest rates for jumbo loans in all markets.

Current verdict on the bill? It’s a step. But in what direction and to what impact on the housing market and the economy at large is less than clear.


Tony Stasiek was an editor at Scotsman Guide. For questions on this article, call (800) 297-6061 or e-mail

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