Bill Text: CA SJR19 | 2013-2014 | Regular Session | Chaptered
Bill Title: High-cost loan limits.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Passed) 2014-08-18 - Chaptered by Secretary of State. Res. Chapter 116, Statutes of 2014. [SJR19 Detail]
Download: California-2013-SJR19-Chaptered.html
BILL NUMBER: SJR 19 CHAPTERED
BILL TEXT
RESOLUTION CHAPTER 116
FILED WITH SECRETARY OF STATE AUGUST 18, 2014
ADOPTED IN SENATE AUGUST 13, 2014
ADOPTED IN ASSEMBLY AUGUST 4, 2014
AMENDED IN ASSEMBLY JUNE 25, 2014
AMENDED IN ASSEMBLY JUNE 12, 2014
INTRODUCED BY Senator Correa
(Coauthor: Assembly Member Dababneh)
MARCH 10, 2014
Relative to high-cost loan limits.
LEGISLATIVE COUNSEL'S DIGEST
SJR 19, Correa. High-cost loan limits.
This measure would express the Legislature's opposition to
reduction of the current national and high-cost conforming loan
limits for Fannie Mae and Freddie Mac by the Federal Housing Finance
Agency (FHFA) and would urge the FHFA to continue to resist
implementation of any such reductions. This measure also would urge
the President and Congress of the United States to join California in
opposing any reduction of the national and high-cost conforming loan
limits.
WHEREAS, Since 1980, Congress has provided in statute for
"high-cost" conforming loan limits so residents in states where the
cost of housing is higher than the national average may still gain
access to safe and affordable mortgages; and
WHEREAS, In 2006, the California Legislature passed a joint
resolution that memorialized the President and Congress of the United
States to recognize California as a high-cost area for purposes of
purchasing a home and to be considered the same status as other
high-cost areas; and
WHEREAS, In 2008, the California Legislature passed a joint
resolution that memorialized its opposition to any reduction in
high-cost loan limits in California; and
WHEREAS, In 2008, the Economic Stimulus Act of 2008 created a
temporary increase in mortgage loan limits and allowed for areas in
California to be recognized as high cost; and
WHEREAS, In July 2008, Congress passed the Housing and Economic
Recovery Act of 2008, which established the current law and formula
for determining loan limits, set the high-cost loan limit formula,
made permanent in statute language that allows for areas in
California to be recognized as high cost, and contained language
prohibiting the reduction of conforming loan limits; and
WHEREAS, In September 2008, Fannie Mae and Freddie Mac were placed
under conservatorship of the Federal Housing Finance Agency (FHFA);
and
WHEREAS, In January 2012, following the expiration of the
temporary high-cost loan limit increase provided in the Economic
Stimulus Act of 2008, Fannie Mae and Freddie Mac high-cost loan
limits were reduced from $729,750 back to the 2006 value of $625,500;
and
WHEREAS, In December 2013, the FHFA issued a request for comments
on a proposal to lower the conforming loan limits for Fannie Mae and
Freddie Mac by an additional $25,000 in select high-cost areas
including California; and
WHEREAS, In May 2014, the Director of the FHFA announced that the
FHFA "will not use its authority as conservator to reduce the loan
limits"; and
WHEREAS, California has over 25 million residents that would be
adversely affected by the proposed regular and high-cost loan limit
reductions; and
WHEREAS, Eleven counties in California have a median home price
above the proposed reduced cap on high-cost loan limits; and
WHEREAS, FHFA data indicates that over 36,000 loans originated in
California could be adversely affected by the proposed loan limit
reduction; and
WHEREAS, California housing markets are only beginning to recover
from a sustained negative market, and continue to lag behind the pace
of recovery being experienced by the rest of the nation; and
WHEREAS, Current high-cost loan limits allow California home
buyers the same access to safe and affordable mortgage capital as
home buyers in states with lower home prices; and
WHEREAS, The adverse effect of lowering the loan limits would have
a negative impact on California home buyers that would ripple
through the housing market and the larger economy; now, therefore, be
it
Resolved by the Senate and the Assembly of the State of
California, jointly, That the Legislature opposes any reduction of
the current national and high-cost conforming loan limits for Fannie
Mae and Freddie Mac by the FHFA, and urges the FHFA to continue to
resist implementation of any such reductions; and be it further
Resolved, That the Legislature urges the President and Congress of
the United States to join California in opposing any reduction of
the national and high-cost conforming loan limits; and be it further
Resolved, That the Secretary of the Senate transmit copies of this
resolution to the President and Vice President of the United States,
to the Speaker of the House of Representatives, to the Majority
Leader of the Senate, to each Senator and Representative from
California in the Congress of the United States, to the Secretary of
the Treasury, and to the Director of the Federal Housing Finance
Agency.
