Industry NewsMortgage

Signs of life in jumbo lending

Big banks compete with credit unions, community banks

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Jumbo lending is staging a comeback of sorts, with major lenders once again buying the oversize mortgages from other lenders or allowing independent mortgage brokers to originate loans for them.Bank of America and Wells Fargo had already been battling each other for market share in jumbo lending this year, with BofA announcing in March it was cutting rates to make more of the loans, which are too big for purchase or guarantee by Fannie Mae and Freddie Mac (see story).Now JPMorgan Chase & Co. has resumed buying jumbo loans made by other "correspondent" lenders, and Citigroup is offering jumbo loans through mortgage brokers, Bloomberg reports.Those practices, common during the housing boom, all but vanished when the secondary market for loans not backed by Fannie, Freddie and Ginnie Mae withered in August and September 2007."The whole market has improved in the last 90 days," said Terry Erwin, chief lending officer for KeyPoint Credit Union, a jumbo lender founded...