GSEs Tell Congress Jumbo Biz Picking Up

Fannie Mae and Freddie Mac have been criticized somewhat for how few jumbo loans they have bought since being granted the authority in February, but officials from the GSEs told Congress Thursday that their companies are beginning to see significant increases in loan submissions. Thomas Lund, executive vice president of Fannie Mae's single-family business, said the government-sponsored enterprise's top 10 seller/servicers now have $3 billion worth of jumbo loans in their pipelines. "We've done $80 million through the end of May," he said. Patti Cook, EVP and chief business officer for Freddie Mac, held onto an earlier prediction that Freddie might buy $15 billion worth of GSE jumbos by year's end. (Under the new authority, Fannie and Freddie can purchase mortgages with balances of up to $729,750 in certain high-cost areas.) The executives told elected officials that their ability to buy jumbos has been hurt because the mortgages cannot be sold forward into TBA (to-be-announced) securities. However, since changing their pricing on jumbos, loan submissions have risen, and rates charged have fallen to the point where they are comparable to those of conventional loans. (For the full story, see the May 26 issue of National Mortgage News.)