BILL NUMBER: SJR 19	AMENDED
	BILL TEXT

	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, as amended, 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  not  to
 implement   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.
   Fiscal committee: no.



   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  memorializes   memorialized
 the President and Congress of the United States to recognize
California  is   as  a high-cost area for
purposes of purchasing a home and  should   to
 be considered the same status as other high-cost areas; and
   WHEREAS, In 2008, the California Legislature passed a joint
resolution  to memorialize   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  
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 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, The FHFA is not bound to follow a policy on loan limits
that protects California homebuyers in the future; and 
   WHEREAS, California has over 25 million residents that 
will   would  be adversely affected by the proposed
regular and high-cost loan limit reductions; and
   WHEREAS,  Nine   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 
will   would  have a negative impact on California
home buyers that  will   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  not
 to  continue to resist implementation of  
implement  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.