McLEAN, Va. – In a move that will ease liquidity in the troubled mortgage market, Freddie Mac announced its commitment yesterday to buy up to $15 billion in jumbo mortgages from four large lenders: Citibank, JP Morgan Chase, Wells Fargo and WaMu.
The deal signals the intentions of Freddie Mac to buy more jumbo mortgages for the secondary market, as allowed under the economic stimulus bill passed in February.
The bill allows both Freddie Mac and Fannie Mae to buy mortgages above the current conforming loan limit for single family homes of $417,000, to as much as $729,750 in the most expensive home real estate markets of the country.
The inability of lenders to sell jumbo loans on the secondary market has caused higher rates for jumbo mortgages, thus weighing down demand for large mortgage loans over the past six months.
