Wall Street Journal (04/17/08) P. D4; Hagerty, James R.
Freddie Mac has reached a deal with a trio of major mortgage lenders--Wells Fargo & Co., J.P. Morgan Chase & Co. and Citigroup Inc.--aimed at making more funds available for bigger home loans. Earlier this year, federal lawmakers passed legislation raising the ceiling on loans that can be purchased by Fannie Mae or Freddie Mac or insured by the FHA to as much as $729,750 in the highest-cost areas. To date, some lenders have been reluctant to offer terms on loans between $417,000 and the new limit, citing lingering uncertainty over how much the two government-sponsored enterprises will pay for them. Consequently, Freddie Mac has agreed to make 90-day commitments to Wells, J.P. Morgan and Citigroup on how much it will pay for the loans based on benchmarks in the pricing of mortgage-backed securities.
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