SAN FRANCISCO - In the midst of a changing housing market and headline risk, the GSEs have had to continually redefine, defend and reassess their roles under intense public scrutiny. At the Mortgage Bankers Association's National Secondary Market Conference & Expo 2005 held here last week, participants at the GSE Executive Update panel discussed their views on pending GSE legislation, the housing sector and the current advances and challenges in providing housing to underserved communities.

Although home price appreciation remains strong, panelists said that double-digit growth is not sustainable, specifically in the coastal regions. This is not as much of a problem in the interior regions, where homeowner incomes remain in line with valuations. Participants also warned against "red flags" - including a growing number of investment properties and alternative mortgage products - although these are not enough to cause a housing bubble to burst on a national scale. However, they remain concerned about certain markets.

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