Freddie To Purchase 'Conforming Jumbo' Loans

Freddie Mac announced on Thursday that it would finance $10 billion to $15 billion in large mortgages called Jumbo Loans from four of the largest U.S mortgage lenders.

The move by the government-chartered mortgage company is designed to increase liquidity in the nation's housing finance markets, although Freddie Mac was quick to point out that setting up a process for packaging the larger loans would take some time.

"Today's announcement marks the first large-scale effort to jump start the stalled jumbo mortgage market under the Economic Stimulus Act,"

Freddie's purchase of the larger conforming mortgages also brings renewed hope to prospective home buyers, who've been waiting for the change to take effect since Congress raised conforming mortgage limits from $417,000 to as much as $729,750 in the most expensive markets.

The four lenders, will finance include; Wells Fargo (NYSE: WFC), WaMu (NYSE:WM), J.P. Morgan Chase (NYSE:JPM) and Citibank (NYSE: C).