Holy retained portfolio, Batman! With a Democratic Congress, nationwide house price depreciation, and now this,[1] Fannie and Freddie look set to swell like a pair of Fugu. MarketWatch’s reliable Rex Nutting summarized [2] it well when he wrote that "the maximum conforming loan limit for U.S. mortgages will be frozen [for a year] at current levels if home prices fall". What this means is that in a falling house price environment, a rapidly increasing proportion of the Jumbo mortgage market could fall below the GSE conforming limit of $417,000, and this magic value is now extended all the way to January 1, 2008.
