Are Million-Dollar Conforming Loan Limits A Market-Crash Flashback?
By KIMBERLEY HAAS Mortgage giants Fannie Mae and Freddie Mac have raised their limits on government-backed loans to $647,200 in most of the country and nearly $1 million in some high-cost American communities. Does that mean lenders are repeating the same mistakes which led to the 2008 crash? This 18% hike in the size of conforming loans is the highest single jump since at least 1970, outpacing the 15.9% increase seen in 2006. Two years later, on Dec. 30, 2008, the Case-Shiller home price index reported its largest drop in history. The credit crisis and housing bubble burst that followed led in part to the Great Recession in the United States. Now some observers fear U.S. markets are moving back to…