The Honorable Brad Sherman
House Office Building
United States House of Representatives
Washington, DC 20515
Dear Representative Sherman:
As you know, the liquidity crisis in the mortgage industry is harming
clients and business throughout our state, as well as our economy in
general. Congress, however, has the power to make a rather simple change
that will relieve a large portion of this burden for thousands of people in
CA and throughout the United States.
The cap for government sponsored Conforming Fixed Interest Rate loans is
currently set at $417,000--which may adequately serve some parts of the US,
but is not high enough for many middle-class homes in our area.
Consequently, many people in CA are powerless to refinance adjustable rate
mortgages that are at risk of foreclosure or default, and others are unable
to purchase new homes for their families at all.
The problem is that the current limits are based on formulas that were
created based on demographics from 1980. Additionally, the limits apply
nationally except for Hawaii and Alaska, which were given High Priced State
status. To be both effective and fair, the limits for our state and others
with higher housing prices need to be brought in line with the higher loan
caps of states like Alaska and Hawaii, which both have a 50% increase to the
conforming limit. In 1992, the US Virgin Islands was successful in asking
congress to allow it to have the benefit of High Priced State status. In
2001, Guam did the same. Our state should be considered a High Priced State
as well. This would increase the current conforming limit of $417,000 to
$625,500 in CA, just like Hawaii and Alaska.
Raising these limits will help thousands of your constituents--from current
homeowners and first-time home buyers to mortgage professionals and hundreds
of related service providers who have been, or will be, devastated by this
crisis.
This is an urgent request for your help. Only you and the members of
Congress can make this desperately needed change. Please respond
immediately to relieve the burden created by these outdated limits and to
help our states residents and economy as a whole begin to recover from this
crisis.
Sincerely,
(Insert Your Name)
(Insert Title)
(Insert Company Name)
(Insert Address)
(Insert City, State & Zip)
(Insert Phone Number)
(Insert E-mail Address)
