The Petalumahomes.com Realty WebLog

In testimony before the Joint Economic Committee, U.S. Federal Reserve Chairman Ben Bernanke proposed allowing Fannie Mae and Freddie Mac to purchase and securitize jumbo mortgages, considering that lawmakers have not made any moves to boost the $417,000 conforming-loan limit.  Under Bernanke’s plan, the government-sponsored enterprises could purchase mortgages up to $1 million, and the federal government would guarantee the loans for a fee; Fannie Mae and Freddie Mac then would securitize and sell them on the secondary market.  “It would be a good idea to make the GSEs ultimately responsible for some, any excess losses or some part of excess losses, relative to the premiums that are paid,” said Bernanke.  Though the plan would increase the federal government’s exposure to the mortgage market, Sen. Charles Schumer (D-N.Y.), committee chairman, and Rep. Carolyn Maloney (D-N.Y.), chairman of the relevant House subcommittee, said they would support it.