Daniel H. Mudd, chief executive of Fannie Mae, knows the feeling when a physician attends a party and a guest wants a diagnosis for a rash or some other ailment.

In Mudd's case, people want to know about the housing market. Often they ask him if it's a good time to refinance their mortgage loan.

Mudd heads the Federal National Mortgage Association, or Fannie Mae. Fannie Mae and the Federal Home Loan Mortgage Corporation (Freddie Mac) purchase mortgages from lenders. This in turn allows the lending institutions to provide more home loans.

Naturally people think Mudd, who runs the larger government-sponsored enterprise, would know about the best time to get a mortgage since Fannie Mae is crucial to the mortgage industry.

But as Mudd points out, he's operating in the back end of the mortgage process after the loans have been originated.

"I'm not retail," he says.

Many homeowners are desperate to know the opportune time to get out of the loans that they won't be able to afford once their teaser rates expire.

Of late, Mudd is fielding questions about a new law that has the potential to lower interest rates for jumbo mortgage loans. First, some background.

A jumbo loan is a mortgage that exceeds $417,000, which is the purchase limit for both Fannie Mae and Freddie Mac. Loans of $417,000 and below are considered conforming because financial institutions can sell them to Fannie or Freddie.

Jumbo loans are needed for areas where home prices exceed that $417,000 limit. Because jumbo loans are not purchased by Fannie or Freddie, they typically carry higher interest rates.

As of Feb. 21, the national average for a 30-year fixed-rate jumbo loan was 6.97 percent, compared to 6.01 percent for a fixed-rate conventional loan. Many jumbo borrowers have adjustable-rate mortgages. A jumbo ARM that adjusts after five years was 5.79 percent compared with 5.12 percent for a non-jumbo ARM with the same term.

In an effort to lower rates for borrowers needing jumbo loans, the recent economic stimulus bill included a provision to allow Fannie Mae and Freddie Mac to buy mortgages above the $417,000 limit.

The new jumbo loan limits won't be the same for all areas. The limits will vary but can't be more than $729,750.

Many jumbo loan holders are anxious to know if rates will fall soon. However, Mudd wasn't sure many homeowners with jumbo loans would actually see lower rates anytime in the near future.

"There will be some benefit," Mudd said. "How much? I don't know."

Mudd questioned whether investors would buy bundles of jumbo loans. Given the mortgage crisis, investors might fear that these larger loans would be more risky, he said.

And, with tighter lending standards, some borrowers won't qualify because their home values have dropped. Or they might not meet other, stricter underwriting requirements.

Still, during our discussion about jumbo loans, I pushed Mudd to provide some idea of when jumbo loan borrowers might approach lenders to refinance. "I don't know," he said.

Then Mudd said if you are worried about a 50 basis point difference in your interest rate (that's half a percentage point), you might be living at the wrong place.

If you have a jumbo mortgage and a half-percentage-point difference is going to mean a great deal to you financially — that is, it will free up money you need to pay for essentials — you're in too much house.

Michelle Singletary writes for The Washington Post.