Jumbo Conforming Mortgages Eligible for TBA Trades: SIFMA

The Securities Industry and Financial Markets Association said Thursday that newly-originated loans to borrowers in high cost areas as defined in recently-passed housing legislation will qualify for incorporation into To-Be-Announced eligible MBS.

...

The TBA market is the most liquid, and consequently the most important secondary market for mortgage loans.

...

But what about everyone else? The inclusion of jumbo conforming mortgages could end up raising conforming rates for all borrowers as traders price in the new loans, although HW’s sources suggested that the 10 percent limit was likely “just the right proportion” to keep the TBA market on track.