Freddie Mac to buy up to $15B in higher value mortgages

Freddie Mac to buy up to $15B in higher value mortgages

Mortgage finance company Freddie Mac said Thursday it would buy up to $15 billion in home loans for higher-priced properties, using new flexibility granted by Congress earlier this year.

Freddie Mac, the second-largest U.S. financier and guarantor of home mortgages, said it would buy the mortgages of up to nearly $730,000 from Wells Fargo & Co., JPMorgan Chase & Co., and Washington Mutual Inc.

Richard Syron, chief executive of the McLean, Va.-based-company said the move "shows how we can bring new liquidity to markets other investors have all but abandoned and make full use of the new tools Congress gave us to help restore stability during the current housing crisis."

The economic stimulus package signed by President Bush in February temporarily raised the maximum size of so-called conforming mortgages that government-sponsored mortgage companies Fannie Mae and Freddie Mac can purchase and market as securities. The limit was raised from $417,000 to as high as $729,750 in expensive parts of the country such as New York and California.

BUSINESS WEEK