Treasury Eyeing Jumbo Securitizations

Treasury Department officials are looking at ways to securitize higher-balance Fannie Mae and Freddie Mac mortgages authorized by the economic stimulus bill so they will have a bigger impact on jumbo mortgage rates. Some market participants say mixing GSE conforming mortgages (that don't exceed $417,000) with a de minimis amount of higher-balance mortgages would make a "more robust" jumbo market, Treasury Secretary Henry Paulson told CNBC-TV. "This is something we are looking at right now and talking about with Fannie Mae and Freddie Mac," he said. The Securities Industry and Financial Markets Association said recently that the higher-balance mortgages securitized by the government-sponsored enterprises should be excluded from to-be-announced pools, which receive the most favorable pricing in the mortgage-backed securities market.