Why jumbo loans haven't recovered like the rest

Discrimination is only one part of this mystery
  • The jumbo market is growing, but after a near-death experience in 2007, it's barely breathing.
  • It is very expensive to comply with the CFPB’s demands and threats. And direct lending by a bank escapes the cost of securitization, but also brings the hazard that if not securitized, the bank has to keep the loan.

Last week, the great Wall Street Journal took a whack at describing the market for jumbo mortgages. The authors discovered that the jumbo market is growing, that banks are central to it, that jumbo rates are almost the same as “conforming,” and found evidence of race discrimination.