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House leaders back $625,000 conforming loan limit

Senate, Bush administration must still go along

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A $150 billion economic stimulus plan being negotiated by the Bush administration and congressional leaders could include a temporary boost in the $417,000 conforming loan limit on mortgages eligible for purchase or guarantee by Fannie Mae and Freddie Mac. The government-sponsored enterprises, or GSEs, may soon be allowed to back loans up to $625,000 nationwide and $700,000 or more in high-cost areas, according to published reports on the negotiations. The Bush administration had previously tied any increase to the conforming loan limit to tighter regulatory oversight of Fannie and Freddie, where accounting scandals led both companies to fire top managers and restate several years of earnings. Congress has been deadlocked on legislation overhauling oversight of Fannie and Freddie for several years, in part because of a separate debate over limits on growth in the companies' combined $1.5 trillion loan portfolios. The Associated Press reported that House leaders of both par...