Reply from Congressman John Campbell

August 16, 2011

Mr. Duane Beisner

22655 Spring Lake Lane

Lake Forest, CA 92630-3057

Dear Mr. Beisner:

Thank you for contacting me to express your thoughts on an extension of the existing conforming loan limits.  I am glad we are in agreement that reducing the loan limits prematurely will have significant and negative consequences for the economy. If Congress does not act before September 30th, 2011, these limits will automatically be lowered in 669 counties across 42 states, jeopardizing access to mortgage credit for homebuyers and sellers in these areas. In the coming weeks, the housing market will begin to feel the effects of the impending lower limits, as realtors and banks anticipate the altered market structure.

As you may know, I recently introduced, along with Congressman Gary Ackerman, H.R. 2508 - the Conforming Loan Limit Extension Act.  If passed, the bill would extend the existing Federal Housing Administration (FHA) and Government Sponsored Enterprise (GSE) conforming loan limits for an additional two fiscal years, through September 30, 2013. It is crucial that we enact this legislation and provide short-term support to homeowners and the economy.

The inescapable and unfortunate reality is that the FHA and the GSEs are currently insuring the vast majority of new mortgage originations. In the wake of the financial crisis private lending entities have been overwhelmingly risk-averse. We cannot rely on private lenders to provide reasonably-priced, long-term, fixed-rate mortgages when they have showed great reluctance to do so over the past few years. Forcing this transition in an anemic market, before the private market has shown their willingness to take on additional mortgage risk is not thoughtful policy. The current state of the housing market demands further short-term stabilization. During this short-term extension, Congress must continue to work towards creating a comprehensive, long-term framework for mortgage finance that attracts private capital and includes an explicit role for government.  Rest assured, I am a leading advocate in Congress for maintaining the current loan limits for FHA and conforming loans.

Thank you again for taking the time to contact me.  Having the benefit of your views is important, and I appreciate you sharing them with me.

I remain respectfully,

JOHN CAMPBELL
Member of Congress

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