The dire state of jumbos

Re: 'Jumbo lending crunch killing high-end sales' (May 18)

Dear Editor:

As a Realtor working in one of those high-end markets, we are seeing homes languish on the market for months on end. Prices are dropping but not by much, so someone, somewhere, hasn't gotten the message just yet. Sure there are a few local banks loaning jumbo loans at more reasonable rates, but they are far and few between.

I must say I am delighted to see NAR realize that we need help here. I love the idea of lifting the limits for certain areas (the San Francisco area is one of those) and reducing the inventory. What concerns me is that this idea could take months and months to float up to the powers that be in Washington. It took five months for the jumbo FHA loan to be implemented and then to learn that, if someone takes that loan out, they're strapped with private mortgage insurance even if they put 20 percent or more down.

The other concern I have is the pipeline we see of potential homes going into default. Not being able to sell a home is the easiest way to send a home into default. Isn't this the vicious circle we need to prevent?

Let's hope that the government realizes this issue and does something about it sooner than later.

Lenore Wilkas
The Wilkas Group/Prudential California Realty
Burlingame, Calif.

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