Conforming loan limits backed by Freddie Mac and Fannie Mae have been temporarily raised, but the battle to improve lending is far from over.

The National Association of Realtors would like to see legislative reform to the government sponsored enterprises. The N.A.R. wants safety and soundness in expanding the GSE's role in the secondary mortgage market. Any reform should include a strong regulator and GSE governance so the GSEs don't get into more trouble than they've already been in due to their creative accounting.

While the temporary limits are nearly $730,000, few believe that conforming loan limits will be allowed to reach that number permanently.

The N.A.R.'s research found that simply increasing the loan limits for Fannie Mae and Freddie Mac to $625,000 would permit as many as 300,000 families to enter the housing market, reduce foreclosures by as many as 210,000 and allow as many as 500,000 jumbo loan borrowers to refinance to lower cost loans.

The savings per household would be between $274 to $411 a month.

But what the temporary reform does is transfer risk to the GSEs from the subprime lenders.

Loans approved for resale by the GSEs are federally insured.

Can we afford for the GSEs to take that much risk?

Treasury Secretary Henry Paulson doesn't think so. He was one of the biggest objectors to raising loan limits without further oversight of the GSEs, but he was steamrolled by Speaker of the House Nancy Pelosi (D-California), the federal government, the real estate lobby and banks.

Let's not forget that Bank of America, with the purchase of Countrywide, is now the biggest mortgage lender, and can now make the equivalent of jumbo loans with ready buyers for its mortgages, nicely packaged into fireproof securities.

What Paulson did was push the economic stimulus package forward with Congress in time for Bush to sign off on it Wednesday.

The issue of oversight for the GSEs hasn't been forgotten, it's just been delayed for the greater good. Let's hope the GSEs will operate as if they already reformed. They should -- with the nation's spotlight on how they will handle the new larger loan limits.

Published: February 14, 2008

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Blanche Evans is the award-winning senior editor of Realty Times, the Internet's leading independent real estate news service. She is featured daily on the Realty Times Video Network in the "Realty Viewpoint" segment. Blanche has been named one of the "25 Most Influential People In Real Estate" by REALTOR Magazine, and has been twice recognized as a "notable." In 2005, she was named "Top Reporter Covering the NAR" by Delahaye-Bacon's. Blanche is a renowned author of five real estate books. Her newest, Bubbles, Booms and Busts: Make Money In Any Real Estate Market, McGraw-Hill, was rave-reviewed by The New York Times. She was also selected from hundreds of real estate experts to contribute to Donald Trump's book, Trump: The Best Real Estate Advice I Ever Received: 100 Top Experts Share Their Strategies, Rutledge Hill Press, and is featured on page 68. Order Now Review - Honors In 2006, Blanche was selected among scores of candidates to author two consumer real estate guidebooks for the National Association of Realtors: The NAR Guide to Home Buying, and The NAR Guide to Home Selling, Wiley & Sons. She is currently planning two new books for the NAR and its members.       Known for her keen insight into real estate industry issues and for her ability to make complex subjects easy to understand, Blanche is a sought-after keynote and continuing education speaker. Real estate organizations from MLSs, to brokerages, to franchisors, to associations hire her to provide up-to-the-minute analysis of real estate industry news and advice on how to improve revenues. Her passionate delivery, peppered with stinging wit, is a huge hit with audiences and fans. Don Klein, CEO Greater Nashville Association of Realtors, Blanche Evans, Richard Courtney, president 2007, GRAR "The GNAR membership meeting last week featured Blanche Evans as the keynote speaker. Her comments and insights resonated extremely well with those in attendance and we have had many requests for copies of her PowerPoint Presentation. She was a terrific part of the membership meeting and convention program!" - Don Klein, CEO Greater Nashville Association of Realtors Coverage from WSMV, Nashville - 8-14-2007 That Interview Guy - Get Inside The Head Of Today's Generation 2007 AE Institute Session - To purchase 2006 AE Institute Session - Parts 1 2 3 4 5 6 7 8 9 HouseValues Mastermind call - Parts 1 2 Blanche's fireside chat with Jeremy Conaway, HAR - Click here. To contact Blanche, email her at . For more articles by Blanche, click here.