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by CareyBot

The Bush administration will consider allowing Fannie Mae and Freddie Mac to guarantee loans in excess of the $417,000 conforming loan limit to inject liquidity into the secondary market for jumbo loans, officials told Congress Thursday. In testimony before the House Financial Services Committee, Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke said that any such move would be temporary, and should be accompanied by tighter oversight of Fannie and Freddie. Bernanke also said such action would have to be taken promptly, because financial markets will recover in coming months. "If it comes on line in March, it's not going to be effective," Bernanke said, responding to questioning by Rep. Richard Baker, R-La. In his prepared remarks to the committee, Paulson said th...