If the Federal Reserve Board suddenly stops purchasing agency MBS on Jan. 1, mortgage rates could jump by 30 basis points to 50 basis points, according to Fannie Mae chief economist Doug Duncan.

Conventional mortgages with principal balance up to $417,000 would likely rise by 30 bp and rates on higher balance loans of $650,000 to $729,750 could go up by 50 bps, he told MortgageWire.

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