Bloomberg reported Monday that Treasury Secretary Henry Paulson voiced support for a plan that would temporarily allow Fannie Mae and Freddie Mac to purchase jumbo loans:
"We would be for lifting the limits for Freddie and Fannie on a temporary basis," Paulson said in Orlando, Florida. "As I talked to members of Congress, I am hearing less and less resistance to reforming the GSEs." ... After a speech in Orlando, Paulson said in response to a question that it would be "bad public policy" to raise Fannie and Freddie's jumbo mortgage limits "forever." He expressed confidence that Congress will pass legislation overhauling the Federal Housing Administration. "We're getting very little pushback on this right now because I think given what's happened, everybody understands how important it is," Paulson said.
Translation: the mortgage industry is about to be legislated to nearly its last wit.