The Housing Crisis Just Got Bigger

Yes, the GSEs limits on the mortgages that they can buy have just been increased from 417,000 to as high as $793,750, and the FHA limits on insurance have gone from $362,790 to $729,750.

The market has responded by increasing the yield spread between debt issued by Fannie Mae and Freddie Mac and 10 year Treasury bonds to 2.38%, the highest spread in 20 years.

Historically, it's been in the 1.0 to 1.5% range, and this means higher mortgage rates, even if the GSEs can now carry your jumbo paper.