Fannie Mae estimates that it could securitize $200 billion in jumbo loans by the December expiration date of its temporary authority to purchase higher-balance mortgages that exceed the $417,000 conforming loan limit. However, the government-sponsored enterprise cannot use the "to-be-announced" market to securitize these higher-balance loans. So secondary-market executives are fretting that investors will demand higher yields and the interest rate on the GSE jumbo loans might not be low enough to get homeowners to refinance. But researchers at Friedman Billings Ramsey Investment Management point out that the differentials between GSE mortgage interest rates and nonagency mortgage interest rates are the "highest ever." And they say they expect the GSE jumbo programs to "inspire active refinancing of eligible nonagency mortgage loans." Meanwhile, Freddie Mac is gearing up to launch its jumbo program. The GSE wants to provide lenders with 90-day forward pricing and credit terms so that eligible borrowers can lock in rates as early as April. "That is the goal we are working towards," said Freddie spokeswoman Sharon McHale. The two mortgage giants can be found online at http://www.fanniemae.com and http://www.freddiemac.com.

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