NEW YORK (3/25/08)--Credit unions and small banks are more likely to offer lower rates on jumbo mortgage loans because they usually hold the loans in their portfolio, says The Wall Street Journal (March 22). The article notes that the slowdown in the housing market is requiring Fannie Mae and Freddie Mac to buy mortgages up to $729,750--well above the traditional cutoff of $417,000 for a jumbo mortgage. Jumbo loans aren't guaranteed by Fannie and Freddie and they are paid off sooner, so they have higher rates. New rules since the housing crunch aim to reduce the growing rate gap between large loans and jumbo loans. The Wall Street Journal says shopping around can turn up better deals because smaller banks and credit unions keep their mortgages instead of selling them on Wall Street to Fannie and Freddie. That means they have lower rates and less onerous restrictions. The article notes that HarborOne CU, in Brockton, Mass., has rates at 5.75% with no points--the same rate it charges on conforming loans.