From CNN:

Back in February, Congress passed into law a quick fix for the housing market. Unfortunately, it hasn’t done much good.

As part of the economic stimulus plan, lawmakers raised the limit on the size of home loans mortgage giants Fannie Mae and Freddie Mac can guarantee, from $417,000 to as high as $729,750 in some of the most expensive U.S. markets. That was supposed to bring down mortgage rates on jumbo loans and help goose sales in cities across the country - mostly on the East and West coasts - where even outhouses go for close to half a mil.

So just how much help has this change been for homeowners? Not much. Six months ago, the rate on a $500,000 30-year fixed mortgage was 6.73%. Today the rate today is only slightly lower at 6.69%. No surprise then that the housing market is still stuck in reverse.

The problem has a lot to do with news that has been bedeviling Fannie (FNM, Fortune 500) and Freddie (FRE, Fortune 500). Basically, the mortgage giants have been racking up losses faster than Brangelina’s adding children. And the market grows more convinced every day that these two so-called government-sponsored entities will in fact need to bailed out with taxpayer funds, according to a plan recently proposed by Treasury Secretary Henry Paulson and passed into law by Congress.

Color no one as especially surprised.

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