New York Senator Charles Schumer has introduced a new bill to temporarily raise the Capitalization for the portfolios of Government Sponsored Enterprises Fannie Mae and Freddie Mac.  It appears Schumer and many Democrats in Congress, including House Financial Services Committee Chairman Barney Frank,  expect Fannie and Freddie to help with the refinancing of subprime borrowers.  Apparently Fed Chairman Ben Bernanke and James Lockhart, the Office of Federal Housing Enterprise Oversight Director, disagree.  They feel that many of the current loans for refinance borrowers can be securitized and seem to want to let the market correct itself.  I feel that Fannie and Freddie don't need to raise their caps, although they could be more lenient in their (Expanded Approval for Fannie Mae) Risk Based Pricing alternatives.

     To me, the most interesting thing of note in Mr. Schumer's bill is requesting an increase in the Fannie/Freddie Loan limit to $625,000 in designated high-cost areas.  I think that would be a huge help in some areas where jumbo pricing has gone through the roof, unless you are a portfolio lender(or broker to one).  What's your take?

Michael Byrne, Mortgage Banker www.mortgageprosforum.com