Relevant:
2008-02-15 — housingwire.com
``Confirming what sources had suggested for the past week, The Securities Industry and Financial Markets Association (SIFMA) said Friday that it will keep newly-conforming jumbo mortgages out of the to-be-announced market. The decision means newly-eligible conforming borrowers aren’t likely to get all of the GSE rate benefits that had been touted by many primary market participants.''
When bailouts are short on "bailing". The following bits are key in explaining why this matters:
The TBA market facilitates the forward trading of MBS issued by the GSEs and Ginnie Mae by creating parameters under which mortgage pools can be considered fungible and thus do not need to be explicitly known at the time a trade is initiated – hence the name “to be announced.†The TBA market is the most liquid, and consequently the most important secondary market for mortgage loans.
...
Many industry insiders had said that including the newly-conforming jumbo loans in TBA trades would essentially raise conforming rates for all borrowers, while potentially gumming up the one part of the mortgage secondary market that is still working.
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