Jumbo loans - those too big for Freddie Mac and Fannie Mae to buy - are costlier than conforming loans and less uniformly priced, according to a new Freddie Mac study.

Among 76 lenders polled, interest-rate quotes for a 30-year fixed-rate jumbo ranged from 7.88% to 8.88%, Freddie Mac said. In contrast, loans that conform to the size requirements for sale to the government-sponsored enterprises have rates that "are consistently uniform from lender to lender and region to region," Freddie said.

Jumbo loans are mortgages bigger than $240,000, which is designated in Fannie Mae's and Freddie Mac's charters as the maximum size of individual loans they may buy. The jumbo loan market is about 20% the size of the market for new conventional mortgages, at about $231 billion, Freddie Mac said.

Adjustable-rate mortgage jumbo loans are the most popular choice, with a 41% share of the jumbo market in 1998. In the conforming market, only 10% of loans were adjustable-rate mortgages in 1998, the company said.

Some questioned Freddie Mac's assertion about pricing in the conforming market.

According to mortgage research company HSH Associates, the national average for conforming loans in the week that ended Aug. 27 was 7.78% for loans with 0.88 points.

But rates from three cities demonstrate that conforming rates do indeed vary. In Indianapolis, for example, the average conforming loan was offered at 8.03% with 0.18 points, while in Denver loans averaged 7.71% with 1.19 points, and in St. Louis loans averaged 7.84% with 0.29 points.

"You do find variations in pricing from market to market to market," said Keith Gumbinger, vice president at HSH. "That is the nature of an open, free marketplace." Nothing prevents lenders from having higher interest rates, so it pays for consumers to shop around, Gumbinger said.

With the mortgage market slowing down and a 40% drop in most lenders' pipelines, "the adjustable-rate mortgage volume is picking up and the fixed-rate volume is declining," said William J. Denton, vice president for secondary marketing at PNC Mortgage in Vernon Hills, Ill.

In the midst of this, Fannie Mae and Freddie Mac are adding fees similar to those in the private market, Denton said. "Now the agencies are starting to adopt expanded loan-to-value risk-based pricing strategies," he said. It's a way for them to buy more loans, he said, "but also a way for them to make more income."

Freddie Mac said that borrowers who take out conforming fixed-rate loans reap $12 billion in savings. The company also said that instead of taking out jumbo loans, borrowers can take out a first mortgage for $240,000 at a lower conforming interest rate and finance the balance with a second mortgage, provided the ratio of the total loan amount to the purchase price of the home is consistent with a lender's underwriting guidelines.

The jumbo market is "a smaller market, it does not have the implied government guarantee, and the buyers are not exactly uniform," said Peter T. Paul, president of Headlands Mortgage Co. in Larkspur, Calif. Spreads between jumbos and agency-eligible loans change, just as mortgage-backed securities do relative to Treasurys, he said.

Though the agencies' guidelines are "virtually identical," in "jumbo-land the difference in investor guidelines is much greater," Paul said. "Therefore, you will get a greater yield differential."

But despite the many participants in the jumbo market, the consumer "is a pretty smart cookie and looks out for his or her own interests," he said. "If they pay a premium, it probably still was the very best deal."

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