Freddie Mac will finance $10 billion to $15 billion in jumbo mortgages from big lenders in an effort to jump start the frozen higher-priced housing market. The move was expected since Congress changed the rules allowing government-sponsored corporations, Freddie and Fannie Mae to purchase mortgages to $729,750 in 224 high-cost markets. This should allow home purchasers in these regions to get lower rates than they otherwise could in the present credit crunch.
"We initially expect conforming jumbo mortgages to have rates that are as much as half a percentage point below the jumbo market rate in many of these high cost markets," said Chairman and Chief Executive Richard Syron.
Freddie will finance up to 90 percent of a property's worth, allowing instant liquidity to Wells Fargo
Co., Citigroup, J.P. Morgan Chase & Co., and Washington Mutual Inc, which did not participate.
Read More at the Wall Street Journal
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