This is the second year in a row that the FHFA has hiked the limit on conforming loans
Loans that qualify for a guarantee are called conforming loans
The company plans to restructure its conforming loan
operations by discontinuing the acquisition and aggregation of conforming loans
for resale to Fannie Mae and Freddie Mac, and instead focus on direct conforming-related investments in mortgage servicing rights and risk-sharing transactions.
Nonetheless, Passmore, Sherlund, and Burgess (2005) do find that the size of the jumbo-conforming spread moves inversely with jumbo MBS liquidity and with factors affecting MBS demand and supply, consistent with the view that liquidity differences are an important determinant of the spread between jumbo and conforming loans
Fannie Mac's decision to utilize the temporary increase in conforming loan
limits to purchase jumbo-conforming mortgages under the same pricing structure accorded portfolio purchases of regular conforming loans
will help home buyers in high-priced markets.
have terms and conditions that follow the guidelines set forth by Fannie Mae and Freddie Mac.
8226; 3% Down Conforming Loans
- Late last year, Fannie Mae and Freddie Mac announced the availability of 97% loan-to-value conforming mortgages, which were retired several years earlier.
The portfolio purchased from Aurora Bank FSB and its Aurora Loan Services LLC unit, both subsidiaries of Lehman Brothers Bancorp Inc, consists of 75% non-conforming loans
in private label securitisations and another 25% of conforming loans
in GSE pools.
Fannie Mae and Freddie Mac are set to add increased pricing requirements to conforming loans
It's important since conforming loans
issued by lenders have lower interest rates, and lower monthly payments, than the kind of loans used to buy properties priced above the limit.