Big Mortgages Excluded From Market

Wall Street Journal (02/19/08) P. A7
The Securities Industry and Financial Markets Association (SIFMA) says the "to be announced market," which allows mortgage-backed securities to be bought and sold by investors prior to their issuance, accounted for 80 percent of mortgage-backed securities issued by Fannie Mae, Freddie Mac and Ginnie Mae during the 2007 fourth quarter. However, SIFMA notes that the "to be announced market" cannot be used to trade securities backed by mortgages higher than the previous conforming loan limit of $417,000. According to SIFMA managing director Sean Davy, these bigger mortgages carry different traits from those under the limit and should be packaged and sold separately.