More Problems For Freddie Mac and Fannie Mae?

If the Feds raise the loan limits for Freddie and Fannie next month they will be able to buy loans that were previously "Jumbo" loans and had higher interest rates. Why did these loans have higher rates? THEY WERE HIGHER RISK LOANS! Now all of the sudden the feds want to put this product in the last(at least partially) stable part of the mortgage market. This part of the market has stayed mostly (but not fully) away from the problem loans and now could be taking on product that could cause these securities to become problems themselves. This was suppose to help the high end market areas of the country but will come out of the taxpayers pockets if there are problems with the loans down the road. www.rateinformer.com