Industry NewsMortgage

Jumbo conforming rates come down to earth

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Jumbo conforming loans eligible for purchase by Fannie Mae and Freddie Mac are now available at nearly the same interest rate as conventional, conforming loans, executives at the companies told lawmakers this week. But the credit crunch is keeping rates elevated on jumbo loans Fannie and Freddie can't buy, and the government-chartered companies could lose their ability to buy mortgages above the $417,000 conforming loan limit at the end of the year if Congress doesn't act. The House Financial Services Committee held a hearing Thursday that was prompted by concerns that rates on jumbo loans remained elevated after Congress and President Bush approved a temporary increase in the conforming loan limit in February. The increase allows Fannie and Freddie to purchase or guarantee so-called jumbo conforming mortgages equal to 125 percent of the conforming loan limit in 224 high-cost areas until the end of the year, up to a maximum of $729,750. Tom Lund, executive vice president...