Rates and terms on jumbo mortgages have relaxed in the last six to 12 months, to the point that interest rates on 30-year fixed jumbos are now comparable to rates on conventional loans, and borrowers with credit scores of 700 or below now have a better shot at obtaining one, bankrate.com’s Polyana da Costa reports.
Jumbo lending by Wells Fargo Home Mortgage was up 15 percent from a year ago during the second quarter of 2013, and has continued to grow, to the highest level since 2007. The nation’s biggest jumbo lenders by loan volume are Wells Fargo, JPMorgan Chase, Bank of America, Quicken Loans and Citibank, da Costa reports, citing a LendingPatterns.com database.
One reason lenders are more eager to underwrite jumbo loans is that they’re more confident about home prices, Tom Wind, executive vice president of residential and consumer lending for EverBank, tells da Costa.
Jumbo loans — those that are too big for Fannie Mae and Freddie Mac to buy, or for the Federal Housing Administration to insure — are typically costlier than loans that conform to the mortgage giants’ standards, because lenders generally have to keep them on their books instead of packaging them into mortgage-backed securities that can be sold to investors. The secondary market for mortgages not backed by Fannie, Freddie or FHA collapsed in 2007. Although lenders have been able to securitize a few small batches of jumbo loans since then, those loans were originated using conservative underwriting standards. Source: newsday.com.