This just in from Freddie Mac:
Freddie Mac has agreed to purchase billions of dollars of new conforming jumbo mortgages with original loan amounts up to $729,750 from Wells Fargo Home Mortgage, Chase, CitiMortgage and WaMu. Freddie Mac conforming jumbo mortgages can be used to finance properties in hundreds of high cost markets designated in the Economic Stimulus Act of 2008 President Bush signed on February 13.
Today's announcement marks the first large-scale effort to jump-start the stalled jumbo mortgage market under the Economic Stimulus Act, which temporarily raised Freddie Mac's conforming loan limit from $417,000 to as much as $729,750 through December 31, 2008. Freddie Mac's purchase of conforming jumbo mortgages is restricted to 224 high cost markets where median home prices exceed Freddie Mac's $417,000 loan limit.
As a result, qualified borrowers can now apply for an array of fixed-rate or adjustable rate conforming jumbo mortgages that will be less expensive than non-conforming jumbo loans in high cost markets. Borrowers can use Freddie Mac conforming jumbo mortgages to finance up to 90% of a property's value.
Because Freddie Mac is buying the new conforming jumbo mortgages for its portfolio, Wells Fargo, Chase, CitiMortgage and WaMu will have instant liquidity and can offer a stable jumbo market rate to qualified borrowers. By working with Wells Fargo, Chase, CitiMortgage, WaMu and other national lenders, Freddie Mac expects to finance between $10 and $15 billion in new jumbo mortgages in 2008. More info here.
Yeah! Until now, the rates for these new loans have been ridiculously high. So this means that rates for our new Conforming Jumbo loans will FINALLY be coming down. And remember, these new loans are officially over December 2008.
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