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 July 16, 2009

Broader Market is Hurt by Troubled Jumbo Home Loans
The current cap for jumbo conforming mortgages is $730,000. Homes on the market which have price tags which exceed this cap are currently proving to be both a tough sell and buy. Some real estate professionals see this as a factor which has frozen this portion of the market while hindering the overall housing market as well.
Mortgage lenders are reluctant to issue loans which exceed the current insured limits offered by both Freddie Mac and Fannie Mae.

The states which are seeing the greatest impact are those where jumbo loans account for over ten percent of all home loans issued. These states include our home state of California, Hawaii, and New York.

Holders of jumbo loans are falling into default at an increasing rate. The current refinancing programs which are offered by the current administration do not include jumbo loans in the rescue plans. Delinquencies of jumbo loans have increased over 1.5% from March of this year compared to March of 2008 to a total of almost 5% of all foreclosures filed.

The chief economist for the National Association of Realtors, Lawrence Yun has expressed concern. He believes that in order for there to be a complete recovery of the housing market, all aspects of the market should recover.