Frank optimistic about extending loan limits

Now that President Barack Obama and lawmakers have come to terms on a deal that raised the national debt ceiling, a Massachusetts congressman believes elevated loan limits will not be cut for mortgage giants Fannie Mae and Freddie Mac.

The Wall Street Journal indicates Representative Barney Frank, ranking Democrat on the House Financial Services Committee, said he thinks lawmakers will keep loan limits where they are.

"I think there's a very real chance they'll get extended," said Frank in an interview with the paper.

It's been widely theorized that U.S. lawmakers will not renew the maximum size of mortgages Fannie Mae and Freddie Mac can guarantee borrowers, which are set to expire in October. If Congress does not act before then, loan limits would be reduced from their current $729,750 to $625,500 in certain high-cost areas.

Those opposed to lowering the limits say it will make securing a mortgage more difficult.

Should limits be lowered, a bad credit rating would make matters even more difficult. Lenders review borrowers' credit history before granting a loan's approval, which sometimes are compromised by errant claims made by creditors. A credit attorney may be able to get a consumer's score back on track, eliminating credit report notations that may have unfairly flagged the consumer as a potential risk.