Last Tuesday, the government held a “Future of Housing Finance” conference to discuss changes needed in this area. Most participants agreed that government assistance for housing must be reduced but not eliminated. Bill Gross, from PIMCO and one of the panelists, called for refinancing all mortgages backed by Fannie/Freddie/FHA that are paying 100 basis points above the current 4.5% market rate. Mr. Gross believes such a move would lift home prices 5% to 10% and provide a $50 Billion stimulus to the economy. I will be watching this situation closely for further developments.

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