Freddie Mac CEO Richard Syron told CNBC that the home-loan provider needs to be able to invest in jumbo loans for about two years in order to help remedy the subprime crisis.
“We think on a temporary basis that for the country’s sake it be a good thing to have us participate in that market,” Syron said in an interview.
Syron spoke after Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson told a House committee that they'd be willing to allow both Freddie Mac and Fannie Mae to buy so-called jumbo loans on a temporary basis. Both are currently barred from investing in jumbo mortgages, which are $417,000 and above.
Bernanke and Paulson dropped some of their resistance to expanding the role of Fannie Mae and Freddie Mac because they said the companies could help restore funding for the largest home loans, which has dried up.
Syron and Fannie Mae CEO Daniel Mudd also spoke at the hearing and issued a fresh appeal to lift the cap on their investments.