Specialty lenders report feeling an ominous ripple as Freddie Mac and Fannie Mae dip their toes into the home equity and subprime mortgage pool.

The big government-sponsored enterprises say the nontraditional loans remain a negligible part of their businesses. But at last week's National Home Equity Mortgage Association conference in Orlando, a surprising 40% of those contacted by the trade group said they have already sold loans and securities to the two enterprises.

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