by Calculated Risk on 1/25/2008 10:34:00 AM

Statement of OFHEO Director James B. Lockhart on Conforming Loan Limit Increase

We are very disappointed in the proposal to increase the conforming loan limit as we believe it is a mistake to do so in the absence of comprehensive GSE regulatory reform. To restore confidence in the markets we must ensure that the GSEs’ regulator has all the necessary safety and soundness tools.

... We will also be working with Fannie Mae and Freddie Mac to ensure that any increase in the conforming loan limit moves through their rigorous new product approval process quickly and has appropriate risk management policies and capital in place.

OFHEO is the regulator charged with ensuring the safety and soundness of Fannie Mae and Freddie Mac.