WASHINGTON (Reuters) - Congress should permanently extend increased loan limits on mortgages backed by Fannie Mae and Freddie Mac that are set to expire, the top Democrat of the House Financial Services Committee said on Monday.
"To have no recognition in federal policy of variations in housing prices makes no sense," Democratic Representative Barney Frank of Massachusetts said at the National Press Club. "The same level can't be right for the whole country."
He said the housing market remains fragile, and it would be "an especially bad time economically" for Congress to sidestep taking action on an extension of the October 1 deadline, when the maximum level for loans guaranteed by Fannie and Freddie drops to $625,500.
Congress raised the ceiling on the size of the loans in 2008 to help ease the credit crisis.
The higher limits, which vary by region, currently peak at $729,750 for single family homes in the most expensive parts of the country, except for Alaska and Hawaii, which have higher limits.
(Reporting by Margaret Chadbourn, editing by Dan Grebler)