The logos for Freddie Mac and Fannie Mae
The logos for Freddie Mac and Fannie Mae - 
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KAI RYSSDAL: One of the big questions consumers have been asking since the Fed started cutting rates has been: "Hey, what about me? What about rates on my credit cards or car loans? Or, oh yeah, my mortgage." A simple version of the really complicated answer gets down into the details of the bond market pretty quickly, but a part of the answer, about mortgages especially, takes us to the government-backed mortgage giants, Fannie Mae and Freddie Mac. Mortgage rates in some markets around the country came down today. In cities like Los Angeles, New York and Washington, banks are offering certain jumbo loans for a little above 6 percent. That's a lot cheaper than they were last week. It's not that banks are suddenly excited to lend again.

Our New York Bureau Chief Jill Barshay reports Fannie and Freddie have a new strategy.

JILL BARSHAY: Mortgage brokers say rates for larger mortgages started dropping a couple days ago. This morning, a $729,000 home loan in the Washington DC area, for example, fell to 6.125 percent.

KEITH GUMBINGER: Average conforming rates last week were hovering just a little bit over 6 percent as well, so that would be a very, very aggressive price for that.

That's Keith Gumbinger. He's a vice president at HSH Associates, which tracks mortgage rates around the country.
Gumbinger says we can thank a new program that allows Freddie Mac and Fannie Mae to guarantee some loans bigger than $417,000. It's in effect in 71 expensive real estate markets. Patricia McClung is a vice president with Freddie Mac. She says she recently started telling big mortgage lenders she'll buy these loans, as long as they meet minimum standards.

PATRICIA MCCLUNG: It's not just that they know that they can sell it to us that results in a lower rate. It's because they know what price we'll pay for them.

Fannie and Freddie are under pressure to bolster the mortgage market, but Gumbinger says they'll probably make sub-standard investment returns on these loans, and they'll be taking on a lot of risk.

GUMBINGER: If Fannie and Freddie wish to make this a more permanent portion of their menu of mortgage offerings, they need to demonstrate that it has been a success in the first place.

This experiment to expand Fannie and Freddie's loan business expires at the end of the year, unless Congress extends it.

In New York, I'm Jill Barshay for Marketplace.