| O Jumbo, O Jumbo Mortgage, Where for art thou? | | | | (and still is) no demand for the securities that are tied |
| Jumbo Mortgage Loans in Current Mortgage | | | | to the Jumbo mortgage product. The government has |
| Landscape | | | | tried to address this problem in a fashion by adjusting |
| A couple of years ago you could get a jumbo | | | | the Conforming loan limit upwards in certain 'high cost' |
| mortgage loan at a competitive rate no matter what | | | | areas of the nation. These increased loan limits allow |
| size or 'shape' your mortgage came in. If you were | | | | for loan amounts up to as much as $729,750 to be |
| buying a $1 million property and could only put 5% or | | | | underwritten and backed by Fannie Mae and Freddie |
| 10% down, no problem, there was a loan for you. | | | | Mac. While this has helped to some degree, there are |
| Wanted a $5 million mortgage on a $10 million house? - | | | | still plenty of extremely qualified borrowers for whom |
| done. Fixed rate, Adjustable rate, Balloon, Interest Only, | | | | these increased loan limits are inadequate. |
| even Negative Amortization loans were available into | | | | Total Mortgage Still Services Jumbo Mortgage Loan |
| the millions of dollars for most property types. The | | | | Luckily, there are a small number of "Portfolio" lenders |
| wisdom of these loan programs may be debatable but | | | | who will still entertain the larger jumbo loan amounts. |
| the fact that they have all but disappeared is | | | | These are lenders who secure the loans they take |
| indisputable. The large national lenders got out of the | | | | against their own deposits rather than sell them on the |
| Jumbo mortgage business beginning in late 2007 and | | | | secondary market. These lenders tend to be very |
| by the beginning of this year the Jumbo mortgage | | | | particular about the quality of the loans they take and |
| landscape was as bleak as anyone could have | | | | can be very exacting in their underwriting standards |
| possible imagined. There simply was no outlet for a | | | | but also tend to offer superb rates to qualified |
| Jumbo loan. | | | | borrowers. It is not every mortgage company that will |
| If a borrower had a loan amount above the | | | | provide you with access to these lenders. These |
| Conforming loan limit of $417K there simply were no | | | | "Portfolio" lenders are equally as discerning when |
| outlets for their loan. This is due to many factors but | | | | choosing the mortgage companies that they do |
| primarily it became a question of demand. There was | | | | business with. |