Fannie and Freddie in the Jumbo market?

This article on Bloomberg talks about Paulson and Bernanke wanting to increase the Fannie and Freddie market from $417,000 to $1,000,000.   I've got a couple of reactions to that: 1. If Fannie and Freddie are currently bleeding money and we don't really know how bad things are in their current portfolios and they don't have enough capital (or it appears that they don't) to handle the current loan pipeline and what do we want to do?  Give them a larger portion of the mortgage market?   Are we asking for trouble?  2. I'd love to see Fannie and Freddie start buying jumbos because I think it would unfreeze the jumbo market a bit. So, what do you think? Share This