Why do FNMA and FHLMC announce new loan limits for one to four-family loans?
Is there a justification to have something called "conforming" loans as opposed to "jumbo" loans?
Is this to separate on the size of the loan? Can someone who knows the history to this perhaps point to a reliable source of reference?
Do you think this categorization helps or hurts lender or borrower in any way in the US residential mortgage market?
The way I understand is that conforming loans are cheaper for borrowers due to its ease for lender to package them to MBS or sell them to Fannie Mae and Freddie Mac. Any other reason why we categorize in such way?