Jumbo Mortgages Get More Costly, Harder to Find
The subprime meltdown is spreading to other parts of the mortgage market. So-called jumbo loans--those above $417,000--are getting more expensive and difficult to find.
Melissa Cohn at Manhattan Mortgage said that unless a borrower has “stellar credit,” they’re going to encounter higher rates and fewer places willing to provide jumbos.
Jumbo rates have risen from just last week. Amerisave is at 6.75%, Countrywide is a full point higher and Bank of America well beyond that.
Some other lenders, like Countrywide, apparently believe that they can't sell the loans to investors in the secondary market and are simply pricing themselves out of certain types of loans. One example: Wells Fargo, which had sharply hiked rates through brokers.
Like subprime loans, jumbos are considered riskier because they can't be bought by Fannie Mae and Freddie Macand repackaged as securities with an implied government guarantee.
August, of course, is always a slow month for real estate, second only to Christmas. So home sales have been erratic.
A broker in Bethesda, Maryland, for example, says she put a house on last week for $1.4 million and she's got four offers. But a realtor trying to sell her own house in Westchester, N.Y. has had to lower the price yet again. A seller in New Jersey tells the same story.