Proposals by the Obama administration to reduce the cap on loans insured by Fannie Mae and Freddie Mac could help revitalize the jumbo securitization market, according to Tom Millon, founder and president of Capital Markets Cooperative, a mortgage origination firm. Millon said, however, that while the reduction from $729,750 to $625,500 is one step toward engaging the private market for jumbos, it isn’t big enough to have a major impact. He said reverting to the $417,000 limit set in 2006 could be enough to jump start the market.
