On the Boulevard to Jumbo Home Loans, Cash is King
Columbus Houses that cost more than $730,000–the cap for conforming jumbo loans–can be extremely tough to buy, sell, or refinance these days, freezing the high-end Central Ohio market and holding down activity in lower-priced markets, real estate practitioners say or so I’ve read.
The slowdown results from lenders’ reluctance to offer mortgages above the amount Fannie Mae and Freddie Mac will insure–amounts that have steadily increased over the years.
The Obama administration program to refinance underwater (those who owe more money on the house than it is worth) mortgages doesn’t offer help to holders of jumbo mortgages, so Columbus area borrowers who can’t refinance are defaulting in increasing numbers. According to First American CoreLogic, jumbos that are 90 days or more delinquent reached 4.83 percent Nationally in March 2009, up from 1.68 percent in March 2008.
Just as first time buyers getting into the marketplace helps the upward tumbling of higher end homes in the domino chain, so too does the trickle down from higher end home sales.
Joe: Our market in Bergen County New Jersey is dealing with the Jumbo problem with weak high end pricing. The high end is still very soft, there are buyers, but not enough pulling the trigger. The financing is very rigged. Maybe if it was this rigged back when we would not of gotten so high in price and over built on spec. However to get out of this we need more reasonable credit criteria for the jumbos.
Richard Stabile Bergen County Real Estate
July 23rd, 2009
Joe: Our market in Bergen County New Jersey is dealing with the Jumbo problem with weak high end pricing. The high end is still very soft, there are buyers, but not enough pulling the trigger. The financing is very rigged. Maybe if it was this rigged back when we would not of gotten so high in price and over built on spec. However to get out of this we need more reasonable credit criteria for the jumbos.