Late last week the Obama Administration did exactly what it does often when it's about to announce something debatable, It leaks a part of it to the news media to lessen the impact. And so it was with white paper, which is the highly-anticipated, and overdue, on reforming Fannie Mae and Freddie Mac. The paper will likely to come out by the end of this week.

As it has been reported on this blog before, it will possibly include several options and scenarios, and will probably wrap them up.

It is already known that the goal is to cut down the government's role in the mortgage market, which at present is ninety five percent of all new originations, as per a report that got out today from Lender Processing Services.

Republicans want to it to happen sooner than later, but most say it will take at least five years.

The news that got leaked last week was the idea of cutting down Fannie, Freddie and FHA loan limits, currently at seven hundred and twenty nine thousand seven hundred and fifty dollars for high-priced markets to six hundred and twenty five thousand.

No one is quite sure that is going to make a whole lot of difference. It is to be remembered that the loan limit used to be four hundred and seventeen thousand dollars before the housing crash. It was hiked as government was the only game in town.

Home prices have fallen dramatically after that, and depending on what report one chooses to believe, are still falling. A far lower loan limit, even while the median home price in California is still, would help to jumpstart private label mortgage securitization again. The jumbo market is already coming back.