Recent changes announced by Fannie Mae and Freddie Mac to improve the secondary market pricing of so-called conforming jumbo mortgages – those loans between $417,000 and $729,750 – seem to be paying off.
According to Inside Mortgage Finance’s weekly survey, the premium initially associated with conforming jumbo loans has effectively vanished and borrowers can now get higher balance Fannie/Freddie mortgages at the same interest rate as lower balance mortgages. But that attractive pricing has not yet translated into many conforming jumbo mortgages being made.
Even though Fannie, Freddie and FHA were authorized to start doing business in conforming jumbo loans back in March, less than $600 million had been securitized as of the end of May. And more than half of the early volume has come from FHA.
