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Wednesday, January 28, 2009

WSJ on Jumbo Loans

by Calculated Risk on 1/28/2009 10:53:00 AM

This article has a couple of scary charts on delinquent jumbo loans. The situation is especially grim in Florida with close to 17% of jumbo loans delinquent.

From the WSJ: Banks and Investors Face 'Jumbo' Threat (hat tip ShortCourage)

About 6.9% of prime "jumbo" loans were at least 90 days delinquent in December, according to LPS Applied Analytics, a mortgage-data research firm. The rate was up sharply from 2.6% a year earlier. In comparison, delinquencies of non-jumbo prime loans that qualify for backing by government agencies climbed to 2.1% from 0.8% in December 2007.
Conforming-loan limits top out at $625,000 in the highest-cost housing markets. To buy a more expensive home, buyers must put up larger down payments -- between 30% and 40% -- and pay higher mortgage rates. Rates on 30-year fixed jumbo mortgages stood at 6.87% last week, compared to 5.34% for conforming mortgages, a difference of 1.53 percentage points, according to HSH Associates, a financial publisher.
I'm sure I'll receive a number of emails from mortgage brokers telling me they have a better deal (please no!), but it's no wonder sales of expensive homes have slowed significantly.