Freddie Mac to buy big loans
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Mortgage finance company Freddie Mac said Thursday that it would buy up to $15 billion in home loans for higher-priced properties, using new flexibility granted by Congress.
Freddie Mac, the second-largest U.S. guarantor of home mortgages, said it would spend $10 billion to $15 billion on mortgages up to nearly $730,000 from Wells Fargo & Co., JPMorgan Chase & Co. and Washington Mutual Inc. and hold the loans on its books.
Freddie Mac’s move will allow the banks to take difficult-to-sell mortgages off their books.
Borrowers in expensive areas such as Los Angeles and New York could benefit with the higher ceiling on loans that the government-sponsored mortgage company can absorb.
Shares of Freddie Mac rose $1.01, or 3.9%, to $26.81.
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