American Homeowners Act of 2007

-Thousands of Bay Area families set to benefit from increased loan limits for high priced markets- Washington, DC - Congresswoman Lynn Woolsey today joined the majority of her House colleagues in passing Expanding American Homeownership Act of 2007, a series of much needed reforms to the Federal Housing Authority designed to buffer the national housing market from continued problems arising from volatility in the sub-prime mortgage industry. Passed by a vote of 348 to 72 the legislation would also increase the loan limits for potential buyers in high priced housing markets, potentially benefiting thousands of families throughout the Bay Area. “Home ownership is part of the American Dream, and we must do everything in our power to make sure that hardworking Americans have access to affordable loans,” Woolsey said. “Unfortunately, due to unscrupulous lending practices over the past few years we are now facing a crisis in the sub-prime mortgage sector that is threatening the housing market nationwide.” In addition to authorizing zero- and lower-down payment loans to help borrowers who can afford mortgage payments (but not the down payment), the legislation increases the FHA loan limits to serve families in higher cost markets, such as the Bay Area. The legislation allows the FHA for the first time to enter high price markets, and raises the maximum loan limit from 95% of the local median home price to 125%. Historically, home prices in Marin and Sonoma counties have been well above the current conforming loan limit, making it difficult for homebuyers to secure financing. The legislation also provides the mortgage sector with increased flexibility needed to respond to housing trends by authorizing the Department of Housing and Urban Development to raise loan limits by up to $100,000 “if market conditions warrant.” With consistently high housing prices in the Bay Area, Woolsey was optimistic that the legislation would benefit first time buyers throughout the 6th district: “As housing prices in our area continue to be higher than most other markets, and the uncertainty in the mortgage market continues to grow, we are seeing more and more people who are being shut out of the housing market, including families with two income earners,” Woolsey said. “It’s just not right, and this legislation is a first step towards stabilizing the mortgage industry and allowing people to own their own homes.”