Here in California Gov. Arnold Schwarzenegger wants Congress to raise the Fannie Mae and Freddie Mac lending
limit from $417,000 to at least $625,000 as part of the economic stimulus package. State Assemblyman Ted
Lieu is pushing for a bill that requires mortgage lenders to tighten up already strict guidelines to make sure
homebuyers can afford their basic monthly bills before qualifying for a mortgage loan. This bill would also ban
certain designer mortgage loans such as the option arm mortgage. The option arm mortgage, also known as the
pay option arm, allows borrowers to pay less than the interest that is due by adding the unpaid interest to the
balance of the mortgage loan. The bill would also allow some homeowners to refinance their homes without
being responsible for any penalties or unnecessary fees.