Jumbo loan borrowers may not see much relief on interest rates when Fannie Mae, Freddie Mac, and the Federal Housing Authority start buying and guaranteeing loans above the current $417,000 conforming loan limit, because the loans will be barred from the most important secondary market where mortgages are bought and sold. The Securities Industry and Financial Markets Association announced that "jumbo light" loans of up to $729,750 that Fannie, Freddie and FHA were temporarily authorized to buy or back as part of the economic stimulus bill signed into law by President Bush Feb. 13 won't be traded in the "to be announced" market where most conforming loans are sold. SIFMA said allowing the new, larger loans to be included in pools of mortgage-backed securities (MBS) traded on the TBA market...
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