Freddie Mac to Pushing Lenders’ Pact
Freddie Mac is expected to announce Thursday an agreement with three major mortgage lenders aimed at making more funds available for large home loans. The agreement is with Wells Fargo & Co., J.P. Morgan Chase & Co. and Citigroup Inc., Freddie officials said.
For the past nine months or so, interest rates on jumbo loans — those bigger than the normal $417,000 limit on mortgages that can be sold to government-sponsored investors Freddie Mac and Fannie Mae — have been much higher than those on smaller ones. That’s because other loan investors, spooked by surging defaults and dropping home prices, are reluctant to buy loans that aren’t backed by Fannie, Freddie or the Federal Housing Administration.
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