November 8 2010 (Jeff Alan)
Jumbo mortgages that had all but disappeared during the housing crisis are starting to make a comeback. Mortgage lenders originated $18 billion in jumbo loans during the third quarter of 2010, up approximately 20 percent from the second quarter.
Jumbo loans are those that exceed the conforming loan limit, which is currently set at $417,000, and can range as high as $729,750 in certain geographic areas, thanks to fairly recent legislation changes that created so-called jumbo-conforming mortgages.
Chase Home Lending increased its jumbo loan lending by 146.2 percent in the first half of 2010, compared to last year.
Wells Fargo increased its jumbo fundings by 47.5 percent, and PHH Corp. saw jumbo loan origination volume soar 64.6 percent during the same period.
As you would expect, jumbo lending remains far below the levels seen during the housing boom years. Jumbo mortgages accounted for just five percent of total mortgage originations in 2009 and so far in 2010, down from about 20 percent during 2004-2007.
Historically, jumbo loans captured about 18 percent of the market.
If you’re in the market for a jumbo loan, understand that underwriting guideline are still very tight, meaning full documentation is typically required, along with a hefty down payment.
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