Unfortunately these policy changes will slow down the reduction in prices that we expect. Of course, many of the new borrowers will become FBs, banks will lose money, or rather, Freddie and Fannie will.
Then the Fed will have to bail them out and print more money in the process… I can only see inflation increasing at high rates in ’08 and beyond.
Raising the conforming limits will come at a cost. We’ll pay for it.
