By Nick Timiros | The Wall Street Journal
Federal officials are preparing to reduce the maximum size of home-mortgage loans eligible for backing by Fannie Mae FNMA -1.61% and Freddie Mac, FMCC -1.77% a move that is likely to face resistance from some lawmakers in Congress and the real estate industry.
The proposed move is designed to wean the mortgage market off government support and allow the market for non-government-guaranteed mortgages to take a bigger role. But critics argue that any such move will shrink the pool of eligible home buyers, stunting the nation’s housing recovery.
“It would be counterproductive to make changes to the loan limits before private capital is fully engaged,” said Gary Thomas, president of the National Association of Realtors.
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