Dire prediction for jumbos

Without federal help, default rate set to soar

In springtime, when all things hopeful and botanical bloom, there was a widespread sprouting of press announcements, particularly from the major banks, about increased dollars allocated to the business of jumbo loans.

Alas, the soil for such pronouncements has proven poor. A dearth of jumbos persists and the market appears to be wilting.

As an executive at one mortgage research company told me off the record, earlier this year there was a flurry of activity with Bank of America and other major banks announcing jumbo loan programs, "but I haven’t heard anything since then. The market doesn’t appear to have changed much. I think some of these announcements were made to generate good press. The banks were saying, ‘Hey, we are open for business — don’t forget us,’ but they weren’t doing anything more than what they were doing before."